Data intelligence vendor Alation revealed Wednesday that it raised $123 million in a series E round of funding to help develop its technology and expand its go-to-market efforts.
The new funding gives Alation a valuation of $1.7 billion and comes a year after the vendor raised $110 million in a series D round in June 2021.
Alation was founded in 2012 with an initial focus on data catalog technology and has expanded its reach over the last decade to encompass data intelligence, including data governance capabilities and data lineage.
The market for data catalog technologies is crowded with multiple vendors that compete against Alation, including Collibra, Atlan, Ataccama, Data.world and Quest's Erwin Data Catalog.
Tech fundraising money flows to the hot segments in the market, and data governance, which is a component of data intelligence, is one of those sectors, according to Ventana Research analyst David Menninger. He said it has been interesting to watch Alation evolve and see its influence on the market in recent years.
David MenningerAnalyst, Ventana Research
"Alation began life as a data catalog company, and to some extent, you could say they helped foster the interest and awareness of data catalogs as a component of an organization's analytics and data technologies," Menninger said. "Over time, they have expanded their products to support data governance more broadly, which is a natural evolution given the role and importance of data catalogs in governance processes."
The need for data intelligence and data catalogs continues to grow
Among the reasons Alation has been able to raise more money is increasing demand for the capabilities the vendor provides.
Alation CEO Satyen Sangani said that in recent years, he has seen organizations -- with a more distributed workforce -- use an increasing number of data assets. Gone are the days when all employees and data were housed in the same building. That distribution of data means it is harder for enterprises to understand what data they have and how it can be used and accessed.
"We see trends pointing toward the lack of trust and comprehensibility around data," Sangani said. "That's what our customers are experiencing, which is why we think the market is starting to really take off for us."
The need for trust isn't something that Alation alone can satisfy, which led to the vendor participating in the creation of the Open Data Quality Initiative in May. That project involves multiple data vendors, including Acceldata, Anomalo, Bigeye, Experian, FirstEigen, Lightup and Soda. The vendors have all pledged to enable interoperability across their respective platforms to help organizations get a better view on data quality.
"What our customers have told us is that there isn't one data quality or data observability technology that they use -- rather, there are lots of different ways to solve the problem," Sangani said.
Data intelligence helps build data culture
Sangani said most organizations he deals with just want to be able to organize their data and make it simple to use.
Part of that process is enabling a data culture -- an environment in which people in an organization view data as an asset and a tool to help provide insights and improve operations. "Data culture is the recognition that data is central to our businesses," Sangani said.
Looking forward, Alation is working on the 2022.4 update for its namesake platform that Sangani said will be out by the end of November.
"From our perspective, this goal of getting people to use data still has a lot of work that needs to be done," he said.