Artificial intelligence startups are capturing headlines with massive venture capital investments, but there's a separate opportunity for companies developing tools that simplify interactions with data-centric applications like AI. This is especially crucial for organizations still navigating the complexities of legacy data systems.
A prime example of this growing niche is CData, a data connectivity solutions provider that recently secured an impressive $350 million in growth funding. Sources close to CData confirmed the round values the company at over $800 million post-funding.
CData serves approximately 7,000 large enterprise clients, many of which aren't traditional tech companies but heavily rely on technology—think major healthcare organizations, retail chains like Office Depot, and hospitality leaders like Holiday Inn. CData specializes in creating connectors that enable these enterprises to seamlessly integrate data from various applications and locations, including on-premises systems.
Lately, CData's tools have gained traction as customers increasingly seek to leverage AI. Organizations have recognized how CData can help them build proprietary AI models utilizing their own internal data.
“One of the primary drivers of our growth is the shift towards enterprises investing in AI,” stated Amit Sharma, the founder and CEO of CData. “While public datasets are useful, proprietary data is essential for businesses. We provide the simplest solution for companies to access their proprietary data for AI applications.”
The funding round included backing from Warburg Pincus and Accel, with both equity and secondary components involved, as Sharma detailed in a recent interview. Additionally, there is a separate debt component to the $350 million, although specifics remain undisclosed. Prior to this round, CData had raised $160 million from Updata, which continues to be an investor.
This fresh influx of capital will primarily support business and product development and follows a robust performance from CData. Launched a decade ago with a focus on application integration, the company has adapted alongside the rise of the "API economy" and cloud technologies.
In essence, many modern applications provide APIs, but they often vary significantly in functionality, and some lack clear APIs altogether. CData addresses this challenge by providing connectors that streamline data integration across various applications and data sources.
“The inconsistency among APIs is a major hurdle,” Sharma explained. If you're extracting data from Salesforce, for instance, you need a deep understanding of how its API functions. “Your developers must grasp its nuances. In contrast, our connectors standardize the experience.” Sharma likens the software landscape to a modern "Tower of Babel," positioning CData as the solution.
In total, CData's platform boasts around 270 connectors and partnerships with about 100 independent software vendors, including industry giants like Google, Salesforce, and Informatica, to enhance user-friendly integrations.
“When using Tableau, you might unknowingly be utilizing a CData connector,” Sharma noted.
These connectors extend beyond traditional applications in accounting and CRM; they are increasingly vital for enterprises eager to leverage AI to tap into their data for building customized models.
Amidst stiff competition from companies like Domo, Simba by Insight Software, and Fivetran, CData's strong customer base, coupled with its commitment to resolving both legacy integration challenges and modern AI-related needs, positions it favorably in the market.
“Data connectivity is essential in a landscape filled with intelligent software. Any AI, analytics, or automation service achieves far superior results when it has access to diverse, cross-functional data,” said Nate Niparko, a partner at Accel. “We’re excited to support CData as it enhances its standards for interconnecting the broadest range of business data.”
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