The longtime partners on Monday signed a definite agreement to become a single company in an all-stock deal. Financial terms were not disclosed. However, Fivetran was valued at $5.6 billion in September 2021 when it raised $565 million in venture capital funding, while DBT Labs was valued at $4.2 billion in February 2022 when it raised $222 million in funding.
Based in Oakland, Calif., Fivetran is a data integration specialist that provides a broad network of connectors enabling customers to extract, transform and load (ETL) data from a multitude of sources. In May, the vendor acquired Census to add reverse ETL capabilities -- sending transformed data back to applications where it can inform decisions -- and in September acquired Tobiko Data to boost its burgeoning data transformation tools.
DBT Labs, based in Philadelphia, originated as an open source platform for transforming raw data into cleansed and validated data. It has since evolved to include semantic modeling and data governance capabilities.
Kevin PetrieAnalyst, BARC U.S.
Given that Fivetran specializes in moving data between platforms while DBT Labs provides a platform for preparing data, the merger brings together complementary capabilities, according to Kevin Petrie, an analyst at BARC U.S.
"This deal makes sense on several fronts," he said. "Fivetran and DBT … are longtime partners, with DBT providing critical transformation capabilities that complement Fivetran's extraction and loading. Both companies have built strong businesses, especially by helping companies consolidate and prepare multi-source data for analytics on cloud data lakehouses."
Sanjeev Mohan, founder and principal of analyst firm SanjMo, likewise noted the value of bringing together capabilities that complement one another.
"I think it's a great deal," he said. "Fivetran is very good at data ingestion and with Census added reverse ETL, but [customers] had to go to DBT to transform data. Fivetran bought Tobiko, but DBT is the 800-pound gorilla in the space. Now, Fivetran has completed the lifecycle of ingestion, modeling, transforming and reverse ETL. It's a good thing."
The transaction, which has been approved by the boards of directors of both Fivetran and DBT Labs, remains subject to customary closing conditions including regulatory approval.
Following closing, Fivetran CEO Geroge Fraser will serve as CEO of the combined entity while DBT Labs founder and CEO Tristan Handy will be its co-founder and president. Together, Fivetran and DBT Labs are approaching $600 million in annual recurring revenue, according to Fivetran.
"Together, we create a more comprehensive, open and interoperable platform at a moment when enterprises are racing to modernize infrastructure for AI," he said. "For Fivetran, the benefit is scale, deeper integration into enterprise data workflows and a stronger path to long-term growth."
Despite the potential benefits of bringing together complementary capabilities, there are potential drawbacks to the merger, according to Petrie. While Fivetran and DBT Labs integrate their respective technologies and cultures, competitors such as Coalesce and Qlik could take advantage of the adjustment period to increase their market share.
"Large [mergers and] acquisitions always struggle with organizational disruptive and turf wars," Petrie said. "This inevitable challenge creates a near-term opportunity for competitors to take share. Over time, I do think the combination of these two will succeed."
Meanwhile, once Fivetran and DBT Labs join forces, one way the combined entity could appeal to potential new users is by improving its governance capabilities, he continued.
"Fivetran and DBT might become the new Informatica -- in other words, the new Switzerland provider of data management tools -- as Informatica folds into Salesforce in coming months," Petrie said. "But to fill that role, they'll need to strengthen their capabilities in data governance, for example by acquiring a data observability vendor."
This story will be updated.
Eric Avidon is a senior news writer for Informa TechTarget and a journalist with more than 25 years of experience. He covers analytics and data management.
