Fivetran Expands Data Integration Tech Capabilities With HVR Acquisition

Fivetran also announced a $565 million funding round that catapults its value to $5.6 billion.

Data integration technology developer Fivetran has struck a deal to buy HVR, a provider of data replication technology, in a move that strengthens Fivetran’s position in the pivotal data integration and management space.

Fivetran also announced a $565 million Series D round of funding – much of which will be used to pay for the acquisition – that pushed the Oakland, Calif.-based company’s valuation to $5.6 billion.

“Together we really cover all the bases,” Fivetran CEO George Fraser said in an interview with CRN, noting that while his company and HVR both provide data integration and replication technology, each has complementary strengths in specific functionality.

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Data integration tools (also known as “ETL” or extract, transform and load tools) play a critical role in helping businesses and organizations move data between operational systems such as ERP and CRM applications, databases, and cloud data warehouse and data lake systems used for data analysis tasks. Such efforts are often a key element of larger cloud migration and digital transformation initiatives.

The data integration technology space includes such established vendors as Informatica and Talend and products from major vendors like Microsoft, Oracle and IBM, according to a recent Magic Quadrant report from market research firm Gartner. But a number of younger companies including Fivetran, HVR and Matillion have been challenging the category leaders.

Fivetran is acquiring HVR in a cash and stock deal valued at $700 million. The acquisition, expected to close in early October, has been approved by both companies’ boards of directors and is subject to customary and regulatory approvals.

Fivetran’s forte is developing tools and data connectors that automate data integration tasks using a fully managed ETL architecture, making it possible to quickly build data pipelines. Fivetran, founded in 2012, works with systems integration, data consulting and technology partners.

HVR, headquartered in San Francisco and also founded in 2012, markets real-time cloud data replication and integration software, based on change-data capture technology, for moving large volumes of data into and between databases in on-premises and complex cloud environments. In July the company announced an expansion of its partner program to include reseller and referral partners.

Fraser said Fivetran is particularly strong in automating data integration tasks with its pre-built, fully managed data connectors and transformation capabilities and in providing connectivity between Software-as-a-Service applications like Salesforce and NetSuite and cloud data systems like Snowflake. “That’s where we really excel,” the CEO said.

HVR, meanwhile, is highly effective in replicating huge volumes of data from “the biggest, baddest databases there are,” Fraser said. In the acquisition announcement Fivetran said its customers will gain access to HVR’s change data capture connectors and a secure, on-premises option for customers with legacy databases.

Fraser said the two companies have already begin planning to integrate the Fivetran and HVR product lines and “create a single, seamless experience for the user that combines the best aspects of both products.”

Initially the two companies’ products will “operate in parallel,” Fraser said, with integration work focused on providing users with unified access to the two products’ functionality. “Most customers will be able to access a fully integrated product sometime next year,” he said of the timetable.

The $565 million Series D round of funding pushes Fivetran’s total funding to $730 million, including a $100 million Series C round in July 2020. Andreessen Horowitz led the round with participation from existing investors General Catalyst, CEAS Investments, Matrix Partners and others, along with new investors ICONIQ Capital, D1 Capital Partners and YC Continuity.

Fraser said most of the funding will go toward paying for the HVR acquisition – the funding round was planned and negotiated in tandem with the acquisition.

Some of the funding will go toward continued development of Fivetran’s product line, the CEO said, while some will be applied to expanding sales and marketing efforts, including channel go-to-market initiatives: The company works with systems integrator partners and the major cloud platform companies.

“Fivetran is a critical component of the modern data stack. Without an always-on, accurate, and reliable way to centralize data, global organizations aren’t maximizing the use of data or data infrastructure,“ said Martin Casado, General Partner at Andreessen Horowitz, in a statement.

“Fivetran solves the complex challenge of scaling and automating data integration better than anyone else and joining forces with HVR will expand Fivetran’s capabilities to address the performance and security requirements of the enterprise and Global 2000,” Casado said. “The modern data stack is a paradigm shift for global enterprises – with billions of dollars of revenue at stake – and Fivetran is a foremost catalyst in this shift.”