Artificial intelligence startups continue to dominate the headlines with immense venture capital rounds, but there’s enough opportunity out there for companies building tools that make it easier to work with data-heavy applications like AI. That’s especially true for organizations that may still have one foot (or both feet) in the legacy data camp.
In one of the latest examples of that opportunity, a data connectivity solutions provider called CData has picked up a whopping $350 million in growth capital. Sources close to the company confirmed to TechCrunch that the round gives it a valuation of over $800 million, post-money.
CData has around 7,000 large enterprise customers, many of which are not tech companies, but lean on tech heavily — think big healthcare providers, Office Depot, Holiday Inn and the like. CData builds connectors that such enterprises can use to stitch together data from different applications — and different locations, not just in the cloud — more easily.
More recently, the company’s tools saw a boost in demand from customers keen to get in on the AI rush — they saw how CData could be used 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 with public datasets, but proprietary datasets 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 invested 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 about that. Before this round, North Carolina-based CData had raised $160 million from a single backer, Updata, which remains an investor with this round.
The funding — to be used both for business and product development — comes on the heels of a strong run of business for the company. CData started off focusing on application integration 10 years ago, Sharma said, but it has evolved with the rise of the so-called “API economy” and cloud computing.
In a nutshell: Many modern applications offer APIs, but they are inconsistent in how they work, and sometimes, there are no clear APIs at all. That’s where CData comes in with its connectors for different apps and data sources, helping knit an organization’s data together more cleanly.
“The challenge with APIs is that each API is very different,” Sharma explained. So, for example, if you are pulling data out of Salesforce using an API, he said, one would have to thoroughly understand 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 says CData is the solution.
In all, Sharma says CData’s platform has some 270 such connectors, and it has partnerships with some 100 independent software vendors, including Google, Salesforce and Informatica, to help build more user-friendly integrations from their end.
“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.
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. Businesses that want to work more with AI can use them to tap their data more easily to build customized models for themselves.
CData has to contend with a number of competitors, like Domo, Simba from Insight Software, Fivetran and many others. But it looks like CData’s current customer traction, combined with its focus on solving both legacy integration issues and modern ones around AI, has helped it seal the deal.
“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.”