Fivetran and dbt Labs announced their merger in an all-stock deal, forming a company poised to generate around $600 million in annual revenue.
The terms of the transaction hinge on an agreed-upon metric tied to revenue and growth rates, and the combination is expected to yield a group valued above the latest private estimates of the two U.S. firms, according to George Fraser, Fivetran’s chief executive, in a interview with Reuters. The final valuation will be determined by the market.
Fivetran, based in Oakland, California, was valued at $5.6 billion in a funding round in September 2021. dbt Labs, headquartered in Philadelphia, Pennsylvania, had reached a $4.2 billion valuation during its Series D in February 2022. The two companies share several investors, including Andreessen Horowitz.
George Fraser will lead the combined entity as CEO, while Tristan Handy, the CEO of dbt Labs, will become president. The board will include representatives from both organizations.
More Than 80% of Shared Customers
Fivetran provides automated data-transfer solutions to centralized data warehouses, while dbt Labs created dbt, an open-source tool for transforming and preparing data for analysis. According to Fraser, roughly 80% to 90% of Fivetran’s customers already use dbt’s tools.
The open-source dbt Core software will remain available under its current license. The aim of the new group is to offer a more comprehensive platform that covers the full spectrum of data management and transformation needs for enterprises.
The combined company, nearing cash-flow breakeven, believes that its larger scale and the complementary nature of its offerings will strengthen its position for a potential initial public offering, although there are no immediate plans.
The closure of the merger is expected within about a year.
