Today was a red-letter day for data networking firm Fivetran. It started by announcing an investment of $565 million at a valuation of $5.6 billion, but it didn’t stop there. Additionally, it disclosed the acquisition of HVR, a rival in the data integration market with over $50 million in funding, for $700 million in cash and stock, marking the company’s second acquisition this year.
The company most recently increased its valuation by more than five times with a $100 million Series C on a $1.2 billion valuation. Similar to that Series C round, General Catalyst, CEAS Investments, Matrix Partners, and other unknown companies or individuals joined Andreessen Horowitz in heading the round. New investors like ICONIQ Capital, D1 Capital Partners, and YC Continuity also put in funds. The business claims that it has now raised $730 million.
The HVR acquisition marks a sizable investment for the business, seizing a firm for a sum nearly equivalent to all the money it has raised to this point. It also offers an opportunity to swiftly scale up market share through the purchase of a competitor. Fivetran purchased Teleport Data earlier this year as it looks to expand its capability and clientele through acquisitions.
Fivetran released a statement saying that the acquisition, valued at $700 million in cash and shares, “strengthens Fivetran’s market position as one of the data integration leaders across all industries and all customer types.”
While that may sound like corporate marketing babble, there is some truth to it because it can be difficult for businesses to pull data from different sources, sometimes in siloed legacy systems. Fivetran and HVR have developed tools that can connect various data sources, making the data usable throughout an organization.
Customer experience management, which uses customer data to offer tailored experiences based on what you know about them, and machine learning models, which utilize data to study and learn how a process works, are two current enterprise strategies that rely heavily on data.
By connecting to applications like Salesforce, Box, or Airtable, databases like Postgres SQL, or data repositories like Snowflake or Databricks, Fivetran and HVR provide the necessary infrastructure to transport the data around to where it is needed.
While the question of whether bigger is better has yet to get clear answers, Fivetran assumes the same as it navigates the startup landscape. The boards of both firms have given their approval to the deal. Although the transaction is still awaiting customary regulatory approval, Fivetran anticipates that it will close in October.
