While artificial intelligence startups continue to garner attention with big venture capital rounds, there's also ample opportunity for companies building tools that make it easier to work with data-heavy applications like AI. This is especially true for organizations that still have one foot (or both) in the traditional data camp.
In the latest example of such an opportunity, data connectivity solutions provider CData has raised a whopping $350 million in growth funding, a round that values the company at more than $800 million after the funding, a source close to the company confirmed to TechCrunch.
CData has about 7,000 large enterprise clients, many of which aren't technology companies but rely heavily on technology — major healthcare providers, Office Depot, Holiday Inn, etc. — and we build connectors that these companies can use to more easily stitch together data from different applications, not just in the cloud, but from different locations.
Recently, the company has seen a surge in demand for its tools from customers wanting to jump on the AI bandwagon and discovering that they can use CData to build their own AI models based on their own internal data.
“One of the biggest drivers for us right now is enterprise investment in AI,” said Amit Sharma, founder and CEO of CData. “Public datasets enable a lot, but proprietary datasets are critical for organizations. We're providing the easiest way for companies to access their proprietary data and use it in their AI workloads.”
Warburg Pincus and Accel invested in the all-stock deal, which includes both equity and secondary components, Sharma said in an interview this week. The $350 million is in addition to a separate debt component, which the company declined to disclose details on. Prior to this round, North Carolina-based CData had raised $160 million from a single investor, Updata, which is continuing to contribute in the round.
The funding, which will be used for both operational and product development, comes on the back of strong financial performance for the company. Sharma said CData began focusing on application integration 10 years ago but has evolved with the rise of the so-called “API economy” and cloud computing.
Simply put, many modern applications offer APIs, but they work inconsistently, or sometimes there isn't a clear API at all. That's where CData comes in, with connectors for a variety of apps and data sources to help you bring your organization's data together more cleanly.
“The challenge with APIs is that they're all so different,” Sharma explains. So, for example, if you use an API to get data from Salesforce, you need to understand inside and out how the Salesforce API works. “Developers have to understand that, but when they use our connectors, they all look the same.” He describes the software world as a modern-day “Tower of Babel,” and says CData is the solution.
In total, CData has about 270 connectors on its platform and has partnered with about 100 independent software vendors, including Google, Salesforce and Informatica, to help them build more user-friendly integrations, Sharma said.
“So when you're using Tableau, you might be using the CData connector within Tableau without actually realizing that you're doing so,” Sharma said.
Sure, these connectors include integrations with more traditional applications in areas like accounting and CRM, but lately the connectors are coming into their own: Businesses looking to get more out of AI can use connectors to more easily leverage their data and build their own customized models.
CData has to compete against a number of competitors, including Domo, Insight Software's Simba and Fivetran, but it seems its current customer base, combined with its focus on solving both traditional integration problems and modern AI problems, helped it secure the deal.
“Data connectivity is an essential component in the world of intelligent software. AI, analytics, and automation services deliver much better outcomes the more cross-functional data they can access,” Nate Niparko, partner at Accel, said in a statement. “We're pleased to see CData building the standard for interconnecting the largest business data catalogs.”