Artificial intelligence startups continue to dominate the headlines when it comes to VC mega-rounds, but there’s also an interesting opportunity out there for those building tools that enable working with data-heavy apps like AI in the first place – especially for organizations that may still have one foot (or both feet) in the legacy data camp.
In one of the latest examples of that, a data connectivity solutions provider called CData has picked up a whopping $350 million in growth capital. Sources close to the company have confirmed to TechCrunch that the money is coming in at a valuation of over $800 million post money.
CData now has around 7,000 large enterprise customers, many of which are not technology companies but lean on tech heavily in their work. (They include big healthcare providers, Office Depot, Holiday Inn, and so on.) CData builds connectors for enterprises to stitch together data from different applications – and different locations, not just in the cloud – more easily. More recently the company’s tooling has had a boost of demand from customers keen to get in on the AI rush, using CData to build proprietary AI models based on their internal data.
“One of the biggest drivers now for us is this move towards enterprises investing in AI,” said Amit Sharma, the founder and CEO of CData. “You can do a lot from public datasets, but proprietary data sets are very important for organizations. We’re the easiest way for companies to access their proprietary data and use it in their AI workloads.”
Warburg Pincus and Accel are the two firms involved in the all-equity transaction, which includes both equity and secondary components, Sharma said in an interview this week. There is also a separate debt component on top of the $350 million, although the company is not disclosing more details on that. Previous to this, North Carolina-based CData had raised $160 million from a single backer, Updata; it remains an investor with this round.
The funding – which will be used both for business and product development – comes on the heels of a strong run of business for the company. CData got its start 10 years ago focusing on application integration, Sharma said. But it has evolved with the rise of the so-called API economy and cloud computing. In a nutshell, while many modern applications do offer developers APIs, there is not always a lot of consistency around how these work, and in some cases, there are no clear APIs at all. CData helps to build connectors between different apps and data sources to help knit an organization’s data together more cleanly.
“The challenge with API’s is that each API is very, very different,” Sharma explained. So, for example, if you are pulling data out of or into Salesforce using an API, he said, “you would have to understand at a very high level, a very detailed level, how the Salesforce API works. Your developers would have to understand it, but when you work with our connectors, all of them look alike.” He describes the world of software as a modern “Tower of Babel” and “CData as the solution.”
In all, Sharma says that there are some 270 of these connectors on CData’s platform, along with partnerships with some 100 independent software vendors, including Google, Salesforce, and Informatica, to help build more user-friendly integrations from their end, many of which are behind the scenes.
“So when you are using Tableau, you might be using a CData connector inside of it without knowing that you’re actually doing so,” Sharma said.
And indeed, while these connectors definitely include integrations with more traditional applications in areas like accounting and CRM, they are also coming into their own more recently for helping businesses that want to work more with AI tap their data more easily to help build more customized models for themselves.
While there are a number of competitors to CData today – they include the likes of Domo as well as Simba from Insight Software, Fivetran and many others; a simple Google search on its name reveals just how many see themselves as rivals – it looks like CData’s current customer traction, plus the scope of what it’s doing to serve both legacy integration issues alongside more modern ones around AI, is what has helped it seal the deal here.
“Data connectivity is a critical enabler in a world of intelligent software — any AI, analytics or automation service delivers far better outcomes the more cross-functional data it can access,” said Nate Niparko, a partner at Accel, in a statement. “We’re thrilled to support CData as it builds on its standards for interconnecting the largest catalog of business data.”
