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Fivetran snags $565m funding round as Snowflake attempts to eat its lunch with in-house data integration tools

Also buys data replication company HVR for $700m

Automated data integration outfit Fivetran has confirmed a $565m funding round – valuing the company at $5.6bn, roughly the GDP of Montenegro.

Meanwhile, the 2013-founded company has used some of its startup capital and bought data replication firm HVR, which employs log-based change data capture (CDC) technology, in a cash-and-stock deal worth around $700m.

The investment arm of web pioneer Marc Andreessen (a16z) led the Fivetran funding round, which also included General Catalyst, CEAS Investments, and Matrix Partners, and takes the total startup capital to $730m to date.

Promising prebuilt connectors, automated schema migration and SQL transformation, Fivetran, which was founded by CEO George Fraser and COO Taylor Brown, counts sportswear manufacturer ASICS, Autodesk, BJ's Restaurants, DocuSign, and media giant Lionsgate among its customers.

The company claims its technology offers ready-to-use connectors that automatically adapt as schemas and APIs change, ensuring consistent, reliable access to data, saving time for data wranglers tasked with data warehousing and analytics problems.

In a pre-canned statement, Martin Casado, general partner at Andreessen Horowitz, said: "Fivetran solves the complex challenge of scaling and automating data integration better than anyone else, and joining forces with HVR will expand Fivetran's capabilities to address the performance and security requirements of the enterprise."

Fivetran has made strides in recent years, hitching its wagon to that other data darling of the day, Databricks, now valued at an incredible $38bn.

Earlier this year, Gartner offered the firm a notable mention as one of the technologies worth considering outside the main cloud providers' data management tools.

Despite investor enthusiasm, Fivetran faces challenges. Namely that the cloud providers and other cloud-based data warehousing companies could set out to eat its lunch.

For example, Snowflake has launched its own ETL tools, hoping data engineers, data scientists, and developers will use ETL/ELT, data preparation, and feature engineering tools within the Snowflake environment rather than using third-party tools.

At the time, Philip Howard, research director at Bloor Research, named Fivetran and Matillion as companies that might find the move a challenge to their future growth strategies. ®

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