Alation bags $123M at a $1.7B valuation for its data-cataloging software • TechCrunch


There has been an explosion of enterprise data in recent years, accelerating with the digital transformations spurred by the pandemic. IDC report commissioned by Seagate expected Companies will collect 42.2% more data by the end of 2022 than in 2020, amounting to several petabytes of data in total. While more data is generally a good thing, especially when it comes to analytics, higher volumes can be cumbersome to organize and judge — even for the most savvy organizations.

That’s why Satyen Sangani, former vice president of Oracle, co-founded Redwood City Alation, a startup that helps crawl company databases in order to create data-search catalogs. After increasing its customer base to over 450 brands and annual recurring revenue (ARR) to more than $100 million, Alation raised $123 million in a Series E round led by Thoma Bravo, Sanabil Investments and Costanoa Ventures with participation from Databricks Ventures and Dell Technologies announced today Capital Corporation, Hewlett Packard Enterprise, Icon Ventures, Queensland Investment Corporation, Riverwood Capital, Salesforce Ventures, Sapphire Ventures and Union Grove.

Alation’s all-share segment is valued at more than $1.7 billion — 15 times higher than the company’s previous valuation in a challenging economic climate. In an interview with TechCrunch, Sangani said the new capital — which brings Alation’s total to $340 million — will be directed to invest in product development (including through acquisitions), expanding Alation’s sales, engineering, and marketing teams, focusing on the public sector and based companies. in Asia Pacific, Europe, Latin America and the Middle East.

“With DC, we will continue to focus on engagement and adoption, collaboration, governance, lineage, APIs and SDKs to enable us to be open and scalable,” Sanghani said by email. “We will bring innovation to market that will increase the number of data assets we cover and the people who will benefit from and access Alation.”

With Alation, Sangani and his co-founders — Aaron Kalb, Feng Niu, and Venky Ganti — sought to build a service that would enable data and analytics teams to capture and understand the full scope of their data. The way Sanjani sees it, most corporate leadership wants to build a “data-driven” culture but is held back by technical hurdles and a lack of knowledge about what data they have, where to live, whether it is trustworthy and how to make the best use of it.

The Alation platform organizes data across different systems. Image credits: Alation

according to For Forrester, between 60% and 73% of the data generated by organizations is not used for analytics purposes. And if it is recent vote By Oracle, 95% of people believe they are overwhelmed by the amount of data available to them in the workplace.

“With the vast amount of data being produced today, it is increasingly difficult for companies to collect, structure and analyze the data they generate,” Sanjani said. The modern enterprise relies on data intelligence and data integration solutions to provide access to valuable insights that fuel critical business outcomes. Alation is the foundation for driving digital transformation. “

Alation uses machine learning to automatically analyze and organize data such as technical metadata, user permissions, and business descriptions from sources like Redshift, Hive, Presto, Spark, and Teradata. Customers can visually track usage of assets such as business glossaries, data dictionaries, and Wiki articles through the reporting feature of the Alation platform, or they can use Alation’s collaboration tools to create lists, annotations, comments, and polls to organize data across different software and systems.

Alation also makes recommendations based on how the information is used and organized. For example, the platform suggests ways that customers can centrally manage their data and compliance policies through the use of integrations and data connectors.

“Machine learning in Alation contributes to data search, data oversight, business glossary, and data attribution,” Sanghani said. More specifically, Alation’s behavioral analysis engine detects behavioral patterns and leverages artificial intelligence and machine learning to make data more user-friendly. For example, the search is simplified by highlighting the most popular assets; Oversight is eased by emphasizing the most active data sets; Governance becomes part of the workflow through tags and suggestions.”

According to IDC, the data integration and intelligence software market is valued at more than $7.9 billion and is growing about $11.6 billion over the next four years. But Alation is not the only seller. The startup competition includes vacant companies such as Informatica, IBM, SAP, and Oracle, as well as new competitors such as CulebraAnd the CastorAnd the legsAnd the data And the AtacamaAll of them provide tools for classifying and organizing data enterprise-wide.

One of Alation’s advantages is absolute momentum, no doubt – its client base includes heavyweights such as Cisco, General Mills, Munich Re, Pfizer, Nasdaq and Salesforce, as well as government agencies such as the Environmental Protection Agency and the Australian Department of Defense. Alation is more than 25% of the Fortune 100 customers, touching sectors such as finance, healthcare, pharmaceuticals, manufacturing, retail, insurance, and technology.

On upcoming revenue, Sangani claims that Alation – which has more than 700 employees and expects to be just under 800 by 2023 – is in a healthy position, as the company pegs its cumulative cash burn rate to ARR at about 1.5 times despite the economic downturn, However, it underlines that customer spending remains strong with increasing demand for data catalog software; Over the past five quarters, Alation’s ARR has increased year on year.

In another win for Alation, the investment from Databricks Ventures is strategic, says Sangani. The two companies will see joint development of engineering, data science, and analytics applications leveraging Databricks and Alations platforms.

“The most successful data intelligence systems will be adopted by everyone. Skilled vendors, but they have nothing, promise everything and succeed little. Likewise, point products have limited success, but only serve to create the data warehouses our customers are trying to avoid,” Sanjani said. Data is about interconnectedness and integration.“We know that and we will continue to put our money behind our beliefs.”

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