Alation raises $50M series C round amid rising demand for data catalogs Posted on : Jan 17 - 2019

Alation, whose product mashes up enterprise collaboration, SQL querying and staple data catalog functionality, is today announcing it has successfully closed its $50M Series C funding round. The company says cash from the new round, which was led by Sapphire Ventures (the growth investment arm of SAP) and Salesforce Ventures, will let its team accelerate research and development to extend the product's capabilities. Existing investors Costanoa Ventures, DCVC (Data Collective), Harmony Partners, and Icon Ventures participated as well.

In a telephone interview earlier this week with Satyen Sangani, Alation's CEO, and Stephanie McReynolds, the company's VP of Marketing, I got some insight into how Alation's business has been evolving. We also got a chance to discuss the data discovery versus regulatory compliance side of data cataloging and the way they mix together in Alation's deal flow and customer implementations.

OVER THE TOP

To begin with, Alation stressed the product expansion potential for this funding round, explaining that 80% of its $23M Series B round is still "in the bank." Meanwhile, by the company's own admission, it's in a noisy market and feels the new money will accelerate R&D, allowing for innovation it can use to differentiate itself and, ostensibly, be heard above that noise.

Meanwhile, Alation has been getting more high-profile customers. Among the company's lighthouse customers these days are big household names, including Daimler, Fox Networks, Hilton Hotels, eBay, Pfizer, GoDaddy, and Albertsons. Many of these customers are new or have become bigger accounts.  Trend-wise, Sangani says Alation's annual revenue growth has been at the "triple-digit" level for four years running, and that the annual net expansion rate of customer spend is 47%.

Alation attributes the latter to its user-based pricing model and the growth patterns of internal adoption at existing customers. In the past, Sangani says, the growth has been fairly organic, and not driven through customer service or professional services efforts, but that those figure increasingly in newer deals.

OFFENSE, DEFENSE

Alation says that, in most cases, customers' initial buys are driven by initiatives around data discovery and building data-driven culture -- the '"offensive" side of data catalog work. Use cases around the "defensive" side, i.e. regulatory compliance, especially with respect to GDPR (the European Union's General Data Protection Regulation), are for the most part follow-on use cases for the product. So it seems compliance may be driving revenue growth but it's Enterprise accounts' zeal to become data-driven that drives the pipeline for first-time sales. View More