Databricks Jumps In The $100M Arcion Acquisition And What It Means

Hey data enthusiasts, did you hear? Databricks, that hotshot startup we’ve been raving about, is at it again! After securing a jaw-dropping valuation of $43 billion (yeah, that’s billion with a “B”), they’ve decided to do a bit of shopping. On their list? The data replication gem, Arcion, which they snagged for a cool $100 million.

Why Arcion, and Why Now?

For those deep into data (or those who just appreciate a good tech acquisition), here’s the scoop: Databricks, known for their cloud-based data lakehouse, was on the lookout for a smoother way to transfer data between sources. That’s where Arcion shines. Their acquisition promises to offer a “scalable, user-friendly, and budget-friendly solution” to bring in data from diverse enterprise sources, as Databricks put it.

Before this acquisition, if you were a Databricks customer, you’d have had to rely on third-party tools, like Informatica or Alteryx, to ferry data into Databricks. With Arcion in their arsenal, Databricks has a shiny new in-house tool to make data transfer more seamless.

Ali Ghodsi, the brains behind Databricks, put it best: “Arcion will be a game changer for organizations. No more juggling multiple tools to transfer data to Databricks. Arcion’s integration will smoothen out a lot of bumps in the Data + AI journey.”

A Closer Look at Arcion

Having raised $18 million since it sprang to life in 2016, Arcion brings more than 20 nifty connectors to the table. Think of links to heavyweights like Oracle, SAP, Salesforce, and Snowflake. What’s more, Arcion has already been in cahoots with Databricks, developing connectors tailored for them.

A platform like Databricks thrives on data (obviously!) to craft dashboards, conjure data apps, and power AI-driven models. To do this magic, it’s essential to feed Databricks with relevant data. That’s where Arcion’s prowess becomes invaluable.

Databricks’ AI Ambitions

Lately, Databricks seems to be dancing to an AI tune. This year saw a whirlwind of AI-driven changes in software, and Databricks wasn’t left behind. A few months ago, they launched Dolly, an open-source language model, hot on the heels of OpenAI’s ChatGPT. To further underline their AI aspirations, they took under their wing the AI-centric data governance platform, Okera.

June saw another significant play when they procured MosaicML, a firm giving OpenAI a run for its money, for a staggering $1.3 billion. With the Arcion acquisition, albeit more focused on data ingestion than AI, Databricks looks set to solidify their position in the ever-evolving AI market. Their existing partnership with Arcion might just be the cherry on top.

A Little Financial Context

To put things in perspective, a bit of number-crunching is in order. As of February 2022, Arcion was reportedly valued at $65 million. This means their sale to Databricks comes at a $35 million premium on their last valuation.

Breaking it down, Arcion’s sale works out to a roughly 54% mark-up for their backers. In the venture capital world, that’s pretty decent. Especially considering Arcion’s valuation when they last fundraised in early 2022 – a time when the venture market was still balancing from its zenith.

Investors from Arcion’s early days, who got on board at an approximated $12 million valuation, are looking at a neat 8x return in less than a trio of years. And in the world of venture capital, that’s some solid math!

Final Thoughts

Databricks’ acquisition of Arcion is more than just a purchase; it’s a statement. As the data world evolves, companies like Databricks are ensuring they remain not just relevant, but trailblazers. For us, it’s popcorn time as we watch this space!