Today was a significant day for Fivetran, a data networking firm. It began by announcing a $565 million investment at a valuation of $5.6 billion, but it didn’t end there. It also announced its second purchase of the year, paying $700 million in cash and stock for HVR, a data integration competitor that had raised more than $50 million. The company most recently received a $100 million Series C on a $1.2 billion valuation, more than doubling its value. Andreessen Horowitz led the round again, with participation from fellow double-dippers General Catalyst, CEAS Investments, Matrix Partners, and other undisclosed organizations or individuals, as in the Series C.
ICONIQ Capital, D1 Capital Partners, and YC Continuity are among the new investors on board. According to the company, it has now raised $730 million.
The HVR acquisition is a big investment for the business, as it buys a firm for almost as much as it has funded so far, but it also gives it an opportunity to swiftly grow its market by buying a competitor. Fivetran bought Teleport Data earlier this year as part of its acquisition strategy to expand its capabilities and customer base.
Fivetran said in a statement that the deal, estimated at $700 million in cash and equity, “strengthens its market position as one of the data integration leaders for all industries and customer types.” While it may sound like corporate jargon, there is some truth to it: collecting data from different sources, including sometimes siloed old systems, is a big barrier for businesses, and both Fivetran and HVR have built tools to connect various data sources and put it to work across a company.
Matevosyan noted that because the company’s CTO and chief engineer are both situated in Barcelona, the hardware R&D takes place there. There are now eight Swifties in use by the company. It sells the data it collects and has established an API that allows consumers to subscribe to access the data. Swifties don’t need specific launch locations because they can launch from “anywhere at any time,” according to Matevosyan, but the company does collaborate with the FAA and air traffic control.
It remains to be seen whether bigger is better in this scenario, but Fivetran is betting on it as it embarks on its startup journey. Both boards of directors have given their approval to the deal. The transaction is still awaiting regular regulatory approval, but Fivetran anticipates it closing in October.