Alation data intelligence platform bucks economic trends and raises $123 million

For Satyen Sangani, CEO and Co-Founder of Leading Data Intelligence Provider Alationdata intelligence has many components: master data management, privacy data management, reference data management, data transformation, data quality, data observability and more.

As the volume of data in most organizations continues to grow and the data-driven culture emerges, data intelligence is becoming increasingly important and gaining in mindshare. According to IDCthe data integration and intelligence software market is valued at over $7.9 billion and growing to $11.6 billion over the next four years.

Founded in 2012 and pursuing a strategy for building an ecosystem around data intelligence, Alation announced today that it has raised $123 million in a Series E funding round. This boosts Alation’s valuation by nearly 50% to over $1.7 billion and follows five consecutive quarters of accelerated annual growth, including recently surpassed $100 million in annual recurring revenue (ARR).

Data intelligence for a data-driven culture

This financing news seems to go against the grain of the economic downturn that is hitting most tech companies. Sangani says he believes the reason is Alation’s approach.

“Our research shows that building a data-driven culture is the #1 priority in the C-suite. Alation helps its customers adopt and develop a data culture – through data search and discovery, data literacy and data governance,” said Sangani.

Alation has managed to increase its ARR and workforce and is looking to expand its offering with new products and an aggressive recruiting, go-to-market and acquisition strategy. For Sangani, it comes down to “having the best product in a fast-growing market.” He points to several trends that are driving the data intelligence market forward.

First, the distribution of data between cloud and on-premises systems. Second, the distribution of people around the world. Third, massive innovation in data with the evolution of the modern data stack. Fourth, global privacy regulations and, finally – more and more data.

Amid all this, Sangani added, companies need to be more data-driven and empower their organizations to drive a data culture. In challenging times, organizations need good data to make good decisions.

To support this goal, Alation’s strategy is not to own one box of each of the components that make up data intelligence. For Sangani, the future of data intelligence is about connectivity and integration.

“Sellers who are versed in all markets, but none, promise everything and succeed with little. Similarly, point products achieve limited success, but only serve to create data silos that our customers try to avoid. Connectivity will be a focus and critical to our future success,” said Sangani.

Building an ecosystem

Surpassing $100 million ARR is a significant milestone that less than 1% of proprietary software-as-a-service (SaaS) companies actually achieve, and Alation is proud of that achievement, Sangani said. However, he added that the bigger factor is that scale drives network effects. Customers want to invest in the leader and other ISVs and SIs want to invest where their customers want to invest.

Alation’s strategy is illustrated by its Open Data Quality Initiative. In addition to adding to the list of partners who have invested in the integration, the company sees customers adopting the integration pattern at scale.

The ecosystem approach also applies to Alation’s investors. Series E financing is led by Thoma Bravo, Sanabil Investments and Costanoa Ventures, with the participation of a new investor, Databricks Ventures.

Thoma Bravo is a new investor in this round. It is a leading software investment firm focused on data-centric technologies and has extensive knowledge of the data intelligence market with investments in Qlik, Talend, Starburst, Embarcadero, Precisely and Infogix. The company is a financial investor, but one that has a very strategic, long-term view of the data intelligence space, Sangani said.

In Databricks, Alation sees one of the largest data platforms in the market and also one that many of its clients use as a strategic investor. This builds on the long-term cooperation between the two companies. It’s a similar pattern to what Alation has seen with other strategic investors such as HP, Snowflake and Salesforce, Sangani said.

Existing and other investors who also participated include Dell Technologies Capital, Hewlett Packard Enterprise (HPE), Icon Ventures, Queensland Investment Corporation, Riverwood Capital, Salesforce Ventures, Sapphire Ventures and Union Grove. Alation’s total funding raised stands at $340 million.