Report: Fivetran in talks with dbt Labs over multibillion-dollar big-data merger

Big data integration company Fivetran Inc. is reportedly holding advanced talks with dbt Labs Inc. over a multibillion-dollar acquisition.

A report by The Information on Saturday said the talks underscore Fivetran’s ongoing strategic effort to revamp its offerings and establish itself as a more important player at a time when data is becoming increasingly vital for enterprises’ artificial intelligence initiatives.

Anonymous sources familiar with the negotiations told The Information that the acquisition could combine Fivetran’s strengths in data movement with dbt Labs’ expertise in data analytics to create a more comprehensive platform for managing vast datasets.

Fivetran made its name as a cloud-based data integration platform that automates the process of extracting, loading and transforming data from various sources into a centralized data warehouse. It simplifies this process with an extensive library of connectors and automated data pipelines, making it easier for businesses to consolidate and analyze their data.

As for dbt Labs, it offers enterprises a cloud-based data transformation tool that’s used to alter structured data and make it easier to process and analyze. It’s designed to perform tasks like consolidating multiple spreadsheets into a single file, filter out inaccuracies in datasets, change the way information is formatted across multiple database systems, and so on. It sees itself as a kind of data control plane that powers data analytics development lifecycles, and is compatible with key data stores such as Snowflake, Databricks and Google BigQuery.

It’s not surprising that the companies might be interested in the prospect of a merger, for both have been looking to expand their platforms through acquisitions and partnerships. Fivetran, which was valued at $5.6 billion following its most recent funding round in September 2021, promptly used some of that money to acquire a competitor called HVR Software Inc. and enhance its database replication capabilities.

Dbt Labs, meanwhile, reached unicorn status in February 2022 when it closed on a $222 million funding round that valued it at $4.2 billion. Earlier this year it acquired a startup called SDF Labs Inc. to help improve its native Structured Query Language comprehension capabilities and power features such as automatic code completion and error identification to help teams improve their overall data quality.

It’s notable that the two companies are familiar with each other, having collaborated on Fivetran’s dbt Cloud integration to enable joint customers to automate data transformations “post load.” By synchronizing Fivetran and dbt Cloud ELT workloads, those customers, which number more than 1,000, can accelerate data transformation and focus their efforts on more proactive work, with full confidence that their insights are based on the freshest possible data.

A possible merger between Fivetran and dbt Labs could eliminate redundancies between the two platforms and help to make them more relevant in areas such as AI data preparation, while reducing data fragmentation and enabling more rapid data analytics.

In recent months, Fivetran has closed on a number of smaller acquisitions. Earlier this month it snapped up a data transformation company called Tobiko Data Inc. for an undisclosed price. In May, it bought a company called Census, which was the pioneer of “reverse ETL,” which allows businesses to move data from centralized storage back into tools such as Salesforce Inc., HubSpot Inc. and Zendesk Inc. and enhance data-driven decision making.

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