F50 Profile: Fivetran Grows Data Pipelines and Customers
(Editor's note: This is a multipart series in which Futuriom profiles the top private companies featured on our Futuriom 50 from past and future!)
For Fivetran, 2023 was a banner year. With trends firmly in place to boost demand for its products, it looks poised to continue down a path of rapid growth. The explosion of data across many platforms -- including cloud, hybrid cloud, and AI -- will likely boost demand for the company's data management products.
The company, which made our Futuriom 50 list for 2023 and looks likely to repeat in 2024, provides software-as-a-service (SaaS) to connect data sources to and from databases, data lakes, and data warehouses. It began the year with a 50% year-over-year increase in its annual revenue run rate to $200 million. Over the months, it grew its customer base to over 6,500, including La-Z-Boy, Conde Nast, JetBlue, Snowflake, Autodesk, the Denver Broncos, Dropbox, and Pitney Bowes, to name just a few; grew its employee roster to 1,100; and added a CRO and CMO to its C-suite. All of which speaks to the growing demand for the kind of technology it offers.
Unifying Fragmented Data
One of the key's to Fivetran's success is providing ways to securely connect increasingly fragmented data sources. To wit: Today’s enterprises can deploy hundreds, if not thousands, of distinct cloud-based and on-premises data-oriented applications. Examples include enterprise resource planning (ERP) systems, Salesforce applications; and databases from IBM, Oracle, SAP, and others. Getting data from these silos and into a data lake or warehouse from which it can be accessed and analyzed has traditionally required a massive development effort. But since 2014, Fivetran has specialized in creating connectors that do the heavy lifting with nearly no coding required. (A metadata API is available to help meet data governance requirements.)
Increased use of AI in enterprise applications has driven demand for this kind of connectivity dramatically upward. For instance, in 2021, Fivetran offered 150 connectors to link enterprise databases to data lakes and other destinations for analysis. It now offers over 400 SaaS-based connectors that work not only to link databases to data lakes and warehouses but to work in reverse as well – whether sources and destinations are on premises or via SaaS. And if an enterprise needs a new connector, Fivetran is ready to create it.
Beyond ETL
Fivetran’s technology began a few years ago as a purportedly faster, safer, and more efficient alternative to extract, transform, and load (ETL) products. The company also says that it’s not ETL but ELT, since it extracts data, loads it into the connector, and transforms it at the destination.
By 2021, Fivetran was well on the way to porting data from numerous sources to destinations such as Snowflake, RedShift, and BigQuery, in part via the acquisition of data replication company HVR in 2021. By 2023, it was able to not only act as a data pipeline but also to automatically clean up data and perform calculations to extract specific data items for porting into a destination. Fivetran also deploys security for data via encryption and hashing of personally identifiable information (PII).
Fivetran has a growing roster of competitors, led by Talend, which offers Stitch, an automated data pipeline ETL service. AWS also offers AWS Glue, a serverless integration service for centralizing data from multiple sources into data lakes. So far, though, Fivetran seems to have more connectors than its rivals.
Availability of connectors doesn’t necessarily reflect on their functionality, though Fivetran claims a differentiator is its ability to act as “more than just a data pipeline.” For example, the service is integrated with dbt (Data Build Tool), an open-source program that enables customers to adjust their data either through a command-line interface (dbt Core) or via a user-friendly web interface that offers additional monitoring and alerting capabilities (dbt Cloud). As noted, Fivetran also allows for the setup of automated calculations on data to extract specific items for loading into a pipeline.
With these and other functions, Fivetran hopes to draw ahead of its competition, though it's likely that the competition will increase with the growing need to unify data across multiple locations. And heightened interest in generative AI could make the data pipeline market an especially hot one in 2024.
Company Profile: Fivetran
Date founded: 2012
Founders: George Fraser, Taylor Brown
Headquarters location: Oakland, Calif., with nine other offices worldwide
Employees: 1,100
CEO: George Fraser
Target market: Enterprises looking to move data in and out of multiple destinations.
Prominent investors: Andreessen Horowitz, General Catalyst, CEAS Investments, Matrix Partners, CONIQ Capital, D1 Capital Partners, YC Continuity
Funding raised to date: $730 million
