Alation, a startup that looks to help companies wrangle and codify an increasing avalanche of data, has joined the small, exclusive club of companies that can count rivals Databricks and Snowflake as co-investors.
The company announced today that it has raised $123 million in a round that sees Databricks join as a strategic investor. The funding round was led by Thoma Bravo, Sanabil Investments, and Costanoa Ventures. Salesforce Ventures, Dell, and Sapphire Ventures were earlier investors in the company.
Alation provides companies with a way to ensure there is a general level of quality to their data — a notion typically referred to inside a company as "data governance." It also gives team members a way to quickly search for relevant data without bombarding them with thousands of options in what is typically called a data catalog.
Among industry insiders, that's caused a fair bit of confusion over the value of a crowded category, with many concerned it may be a feature, rather than a product. However, Alation considers itself a "data intelligence" tool, Satyen Sangani, CEO and cofounder, told Insider in a recent interview. It aims to bring both those and a number of other functions under one service to help companies keep their data orderly and useful.
"We were a category creation company originally—it was very much like, is this a feature or a product, why do you need one," he said. "Often it was a Rorschach test, the investor liked it or didn't, and it all was about broad problem statement and 'do I like you and the rest of the team.' Now I think it's about numbers, and total addressable market, and relative market position."
Founded in 2012, Alation recently said it passed $100 million in annual recurring revenue. But given the number of functions it touches in a company's data workflow, it exists in a crowded category with competitors like Collibra and Atlan. There are also smaller companies in the data cataloging space including firms like Metaphor Data, Acryl Data, and Stemma.
All this comes amid an explosion in the collection and consumption of data riding the growth of cloud tools like Snowflake and Databricks. Databricks has its own catalog product, though it (and Snowflake) often work closely with — or, as in this case, invest in — these types of tools.
Alation's funding comes amid a broader potential downturn in tech as layoffs hit multiple companies. Data tools like Alation, however, have been able to still grow and find financing, Sangani said. He said that while budgets for data tools and teams have traditionally been protected, there may be some increased pressure to show a return on investment for some investments.
"When you have to make hard choices you need good data, and that logic extends to data tools," Sangani said. "But I do think the sales cycles are much more pointed now."
Databricks and Snowflake are also co-investors in data collaboration tool Hex, $900 million machine learning startup Tecton, and $4.2 billion data juggernaut Dbt Labs.
