DREAMTECH NEWS

Jitsu nabs $2M Seed to build open source data integration platform

Jitsu, a graduate of the Y Combinator Summer 2020 cohort, is developing an open source data integration platform that helps developers send data to a data warehouse. Today, the startup announced a $2 million seed investment.

Costanoa Ventures led the round with participation from YCombintaor, The House Fund and SignalFire.

In addition to the open source version of the software, the company has developed a hosted version that companies can pay to use, which shares the same name as the company. Peter Wysinski, Jitsu’s co-founder and CEO, says a good way to think about his company is an open source Segment, the customer data integration company that was recently sold to Twilio for $3.2 billion.

But he says, it goes beyond what Segment by allowing you to move all kinds of data whether customer data, connected device data or other types. “If you look at the space in general, companies want more granularity. So let’s say for example, a couple years ago you wanted to sync just your transactions from QuickBooks to your data warehouse, now you want to capture every single sale at the point of sale. What Jitsu lets you do is capture essentially all of those events, all of those streams, and send them to your data warehouse,” Wysinski explained.

Among the data warehouses it currently supports include Amazon Redshift, Google BigQuery, PostGres and Snowflake.

The founders built the open source project called EventNative to help solve problems they themselves were having moving data around at their previous jobs. After putting the open source version on GitHub a few months ago, they quickly attained 1000 stars, proving that they had delivered something that solved a common problem for data teams. They then built the hosted version, Jitsu, which went live a couple of weeks ago.

For now, the company is just the two co-founders, Wysinski and CTO Vladimir Klimontovich, but they intend to do some preliminary hiring over the next year to grow the company, most likely adding engineers. As they begin to build out the startup, Wysinski says that being open source will help drive diversity and inclusion in their hiring.

“The goal is essentially to go after that open source community and hire people from anywhere because engineers aren’t just […] one color or one race, they’re everywhere, and being open source, and especially being in a remote world, makes it so so much simpler [to build a diverse workforce], and a lot of companies I feel are going down that road,” he said.

He says along that line, the plan is to be a fully remote company, even after the pandemic ends, as they hire from anywhere. The goal is to have quarterly offsite meetings to check in with employees, but do the majority of the work remotely.


By Ron Miller

Salesforce buys Slack in a $27.7B megadeal

Salesforce, the CRM powerhouse that recently surpassed $20 billion in annual revenue, announced today it is wading deeper into enterprise social by acquiring Slack in a $27.7 billion megadeal. Rumors of a pending deal surfaced last week, causing Slack’s stock price to spike.

Salesforce co-founder and CEO Marc Benioff didn’t mince words on his latest purchase. “This is a match made in heaven. Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world,” Benioff said in a statement.

Slack CEO Stewart Butterfield was no less effusive than his future boss. “As software plays a more and more critical role in the performance of every organization, we share a vision of reduced complexity, increased power and flexibility, and ultimately a greater degree of alignment and organizational agility. Personally, I believe this is the most strategic combination in the history of software, and I can’t wait to get going,” Butterfield said in a statement.

Every worker at every company needs to communicate, something that Slack can ably empower. What’s more, it also facilitates external communication with customers and partners, something that should be quite useful for a company like Salesforce and its family of offerings.

Ultimately, Slack was ripe for the taking. Entering 2020 it had lost around 40% of its value since it went public. Consider that after its most recent earnings report, the company lost 16% of its value, and before the Salesforce deal leaked, the company was worth only a few dollars per share more than its direct listing reference price. Toss in net losses of $147.6 million during the two quarters ending July 31, 2020, Slack’s uninspiring public valuation and its winding path to profitability and it was a sitting target for a takeover like this one. The only surprise here is the price.

Slack’s current valuation, according to both Yahoo and Google Finance is just over $25 billion, which given its very modest price change after-hours means that the market priced the company somewhat effectively. Slack is up around 48% from its valuation that preceded the deal becoming known.

The new deal also puts Salesforce more on par — and in competition — with its arch rival and sometime friend Microsoft, whose Teams product has been directly challenging Slack in the market. Microsoft, which passed on buying Slack in the past for a fraction of what Salesforce is paying today, has made Teams a key priority in recent quarters, loathe to cede any portion of the enterprise software market to another company.

What really has set Slack apart from the pack, at least initially, was its ability to integrate with other enterprise software. When you combined that with bots, those intelligent digital helpers, the company could potentially provide Salesforce customers with a central place to work without changing focus because everything they need to do can be done in Slack.

The company’s historic growth helped Slack raise over $1 billion while private, earning an impressive $7 billion valuation before going public last year. But while the Glitch-to-unicorn story appears simple, Slack has always faced entrenched competition from the likes of not only Microsoft, but also Cisco, Facebook, Google and even Asana and Monday.com.

Today’s deal comes after Salesforce’s purchase of Quip in 2016 for $750 million. Quip brought a way of socially sharing documents to the SaaS giant, and when paired with the Slack acquisition gives Salesforce a much more robust social story to tell than its internal option Chatter, an early attempt at enterprise social that never really caught on.

It’s worth noting that Salesforce was interested in Twitter in 2016, the same year that Microsoft was reportedly interested in Slack, but eventually walked away from that deal when shareholders objected, not wanting to deal with the controversial side of the social platform.

Slack was founded in 2013, but its origins go back to an online multiplayer game company called Glitch that was founded in 2009. While the game was ultimately a failure, the startup developed an internal messaging system in the process of building that company that later evolved into Slack.

For Slack, the path to the public markets was fraught with hype and outsized expectation. The company was famous, or as famous as an enterprise software company can be. At the time it felt like the its debut was the start of a long tenure as an indie company. Instead, that public life has been cut short by a huge check. Such is the dog-eat-dog world of tech.


By Ron Miller

Ivanti has acquired security firms MobileIron and Pulse Secure

IT security software company Ivanti has acquired two security companies: enterprise mobile security firm MobileIron, and corporate virtual network provider Pulse Secure.

In a statement on Tuesday, Ivanti said it bought MobileIron for $872 million in stock, with 91% of the shareholders voting in favor of the deal; and acquired Pulse Secure from its parent company Siris Capital Group, but did not disclose the buying price.

The deals have now closed.

Ivanti was founded in 2017 after Clearlake Capital, which owned Heat Software, bought Landesk from private equity firm Thoma Bravo, and merged the two companies to form Ivanti. The combined company, headquartered in Salt Lake City, focuses largely on enterprise IT security, including endpoint, asset, and supply chain management. Since its founding, Ivanti went on to acquire several other companies, including U.K.-based Concorde Solutions and RES Software.

If MobileIron and Pulse Secure seem familiar, both companies have faced their fair share of headlines this year after hackers began exploiting vulnerabilities found in their technologies.

Just last month, the U.K. government’s National Cyber Security Center published an alert that warned of a remotely executable bug in MobileIron, patched in June, allowing hackers to break into enterprise networks. U.S. Homeland Security’s cybersecurity advisory unit CISA said that the bug was being actively used by advanced persistent threat (APT) groups, typically associated with state-backed hackers.

Meanwhile, CISA also warned that Pulse Secure was one of several corporate VPN providers with vulnerabilities that have since become a favorite among hackers, particularly ransomware actors, who abuse the bugs to gain access to a network and deploy the file-encrypting ransomware.


By Zack Whittaker

AWS adds natural language search service for business intelligence from its data sets

When Amazon Web Services launched QuickSight, its business intelligence service, back in 2016 the company wanted to provide product information and customer information for business users — not just developers.

At the time, the natural language processing technologies available weren’t robust enough to give customers the tools to search databases effectively using queries in plain speech.

Now, as those technologies have matured, Amazon is coming back with a significant upgrade called QuickSight Q, which allows users to just ask a simple question and get the answers they need, according to Andy Jassy’s keynote at AWS re:Invent.

“We will provide natural language to provide what we think the key learning is,” said Jassy. “I don’t like that our users have to know which databases to access or where data is stored. I want them to be able to type into a search bar and get the answer to a natural language question.

That’s what QuickSight Q aims to do. It’s a direct challenge to a number of business intelligence startups and another instance of the way machine learning and natural language processing are changing business processes across multiple industries.

“The way Q works. Type in a question in natural language [like]… ‘Give me the trailing twelve month sales of product X?’… You get an answer in seconds. You don’t have to know tables or have to know data stores.”

It’s a compelling use case and gets at the way AWS is integrating machine learning to provide more no-code services to customers. “Customers didn’t hire us to do machine learning,” Jassy said. “They hired us to answer the questions.”


By Jonathan Shieber

AWS announces DevOps Guru to find operational issues automatically

At AWS re:Invent today, Andy Jassy announced DevOps Guru, a new tool for DevOps teams to help the operations side find issues that could be having an impact on an application performance. Consider it like the sibling of CodeGuru, the service the company announced last year to find issues in your code before you deploy.

It works in a similar fashion using machine learning to find issues on the operations side of the equation. “I’m excited to launch a new service today called Amazon DevOps Guru, which is a new service that uses machine learning to identify operational issues long before they impact customers,” Jassy said today.

The way it works is that it collects and analyzes data from application metrics, logs, and events “to identify behavior that deviates from normal operational patterns,” the company explained in the blog post announcing the new service.

This service essentially gives AWS a product that would be competing with companies like Sumo Logic, DataDog or Splunk by providing deep operational insight on problems that could be having an impact on your application such as misconfigurations or resources that are over capacity.

When it finds a problem, the service can send an SMS, Slack message or other communication to the team and provides recommendations on how to fix the problem as quickly as possible.

What’s more, you pay for the data analyzed by the service, rather than a monthly fee. The company says this means that there is no upfront cost or commitment involved.


By Ron Miller

AWS announces high resource Lambda functions, container image support & millisecond billing

AWS announced some big updates to its Lambda serverless function service today. For starters, starting today it will be able to deliver functions with up to 10MB of memory and 6 vCPUs (virtual CPUs). This will allow developers building more compute-intensive functions to get the resources they need.

“Starting today, you can allocate up to 10 GB of memory to a Lambda function. This is more than a 3x increase compared to previous limits. Lambda allocates CPU and other resources linearly in proportion to the amount of memory configured. That means you can now have access to up to 6 vCPUs in each execution environment,” the company wrote in a blog post announcing the new capabilities.

Serverless computing doesn’t mean there are no servers. It means that developers no longer have to worry about the compute, storage and memory requirements because the cloud provider — in this case, AWS — takes care of it for them, freeing them up to just code the application instead of deploying resources.

Today’s announcement combined with support for support for the AVX2 instruction set, means that developers can use this approach with more sophisticated technologies like machine learning, gaming and even high performance computing.

One of the beauties of this approach is that in theory you can save money because you aren’t paying for resources you aren’t using. You are only paying each time the application requires a set of resources and no more. To make this an even bigger advantage, the company also announced, “Starting today, we are rounding up duration to the nearest millisecond with no minimum execution time,” the company announced in a blog post on the new pricing approach.

Finally the company also announced container image support for Lambda functions. “To help you with that, you can now package and deploy Lambda functions as container images of up to 10 GB in size. In this way, you can also easily build and deploy larger workloads that rely on sizable dependencies, such as machine learning or data intensive workloads,” the company wrote in a blog post announcing the new capability.

All of these announcements in combination mean that you can now use Lambda functions for more intensive operations than you could previously, and the new billing approach should lower your overall spending as you make that transition to the new capabilities.


By Ron Miller

Vista acquires Gainsight for $1.1B, adding to its growing enterprise arsenal

Vista Equity Partners hasn’t been shy about scooping up enterprise companies over the years, and today it added to a growing portfolio with its purchase of Gainsight.  The company’s software helps clients with customer success, meaning it helps create a positive customer experience when they interact with your brand, making them more likely to come back and recommend you to others. Sources pegged the price tag at $1.1 billion.

As you might expect, both parties are putting a happy face on the deal, talking about how they can work together to grow Gainsight further. Certainly, other companies like Ping Identity seem to have benefited from joining forces with Vista. Being part of a well capitalized firm allowed them to make some strategic investments along the way to eventually going public last year.

Gainsight and Vista are certainly hoping for a similar outcome in this case. Monti Saroya, co-head of the Vista Flagship Fund and senior managing director at the firm sees a company with a lot of potential that could expand and grow with help from Vista’s consulting arm, which helps portfolio companies with different aspects of their business like sales, marketing and operations.

“We are excited to partner with the Gainsight team in its next phase of growth, helping the company to expand the category it has created and deliver even more solutions that drive retention and growth to businesses across the globe,” Saroya said in a statement.

Gainsight CEO Nick Mehta likes the idea of being part of Vista’s portfolio of enterprise companies, many of whom are using his company’s products.

“We’ve known Vista for years, since 24 of their portfolio companies use Gainsight. We’ve seen Gainsight clients like JAMF and Ping Identity partner with Vista and then go public. We believe we are just getting started with customer success, so we wanted the right partner for the long term and we’re excited to work with Vista on the next phase of our journey,” Mehta told TechCrunch.

Brent Leary, principle analyst at CRM Essentials, who covers the sales and marketing space says that it appears that Vista is piecing together a sales and marketing platform that it could flip or go public in a few years.

“It’s not only the power that’s in the platform, it’s also the money. And Vista seems to be piecing together an engagement platform based on the acquisitions of Gainsight, Pipedrive and even last year’s Acquia purchase. Vista isn’t afraid to spend big money, if they can make even bigger money in a couple years if they can make these pieces fit together,” Leary told me.

While Gainsight exits as a unicorn, the deal might not have been the outcome it was looking for. The company raised over $187 million, according to Pitchbook data, though its fundraising had slowed in recent years. Gainsight raised $50 million in April of 2017 at a post-money valuation of $515 million, again per Pitchbook. In July of 2018 it added $25 million to its coffers, and the final entry was a small debt investment raised in 2019.

It could be that the startup saw its growth slow down, leaving it somewhere between ready for new venture investment and profitability. That’s a gap that PE shops like Vista look for, write a check, shake up a company and hopefully exit at an elevated price.

Gainsight hired a new chief revenue officer last month, notably. Per Forbes, the company was on track to reach “about” $100 million ARR by the end of 2020, giving it a revenue multiple of around 11x in the deal. That’s under current market norms, which could imply that Gainsight had either lower gross margins than comparable companies, or as previously noted, that its growth had slowed.

A $1.1 billion exit is never something to bemoan — and every startup wants to become a unicorn — but Gainsight and Mehta are well known, and we were hoping for the details only an S-1 could deliver. Perhaps one day with Vista’s help that could happen.


By Ron Miller

C3.ai’s initial IPO pricing guidance spotlights the public market’s tech appetite

On the heels of news that DoorDash is targeting an initial IPO valuation up to $27 billion, C3.ai also dropped a new S-1 filing detailing a first-draft guess of what the richly valued company might be worth after its debut.

C3.ai posted an initial IPO price range of $31 to $34 per share, with the company anticipating a sale of 15.5 million shares at that price. The enterprise-focused artificial intelligence company is also selling $100 million of stock at its IPO price to Spring Creek Capital, and another $50 million to Microsoft at the same terms. And there are 2.325 million shares reserved for its underwriters as well.

The total tally of shares that C3.ai will have outstanding after its IPO bloc is sold, Spring Creek and Microsoft buy in, and its underwriters take up their option, is 99,216,958. At the extremes of its initial IPO price range, the company would be worth between $3.08 billion and $3.37 billion using that share count.

Those numbers decline by around $70 and $80 million, respectively, if the underwriters do not purchase their option.

So is the IPO a win for the company at those prices? And is it a win for all C3.ai investors? Amazingly enough, it feels like the answers are yes and no. Let’s explore why.

Slowing growth, rising valuation

If we just look at C3.ai’s revenue history in chunks, you can argue a growth story for the company; that it grew from $73.8 million in the the two quarters of 2019 ending July 31, to $81.8 million in revenue during the same portion of 2020. That’s growth of just under 11% on a year-over-year basis. Not great, but positive.


By Alex Wilhelm

As Slack acquisition rumors swirl, a look at Salesforce’s six biggest deals

The rumors ignited last Thursday that Salesforce had interest in Slack. This morning, CNBC is reporting the deal is all but done and will be announced tomorrow. Chances are, this is going to a big number, but this won’t be Salesforce’s first big acquisition. We thought it would be useful in light of these rumors to look back at the company’s biggest deals.

Salesforce has already surpassed $20 billion in annual revenue, and the company has a history of making a lot of deals to fill in the road map and give it more market lift as it searches for ever more revenue.

The biggest deal by far so far was the $15.7 billion Tableau acquisition last year. The deal gave Salesforce a missing data visualization component and a company with a huge existing market to feed the revenue beast. In an interview in August with TechCrunch, Salesforce president and chief operating officer Bret Taylor (who came to the company in the $750 million Quip deal in 2016), sees Tableau as a key part of the company’s growing success:

“Tableau is so strategic, both from a revenue and also from a technology strategy perspective,” he said. That’s because as companies make the shift to digital, it becomes more important than ever to help them visualize and understand that data in order to understand their customers’ requirements better.”

Next on the Salesforce acquisition hit parade was the $6.5 billion Mulesoft acquisition in 2018. Mulesoft gave Salesforce access to something it didn’t have as an enterprise SaaS company — data locked in silos across the company, even in on-prem applications. The CRM giant could leverage Mulesoft to access data wherever it lived, and when you put the two mega deals together, you could see how you could visualize that data and also give more fuel to its Einstein intelligence layer.

In 2016, the company spent $2.8 billion on Demandware to make a big splash in e-Commerce, a component of the platform that has grown in importance during the pandemic when companies large and small have been forced to move their businesses online. The company was incorporated into the Salesforce behemoth and became known as Commerce Cloud.

In 2013, the company made its first billion dollar acquisition when it bought ExactTarget for $2.5 billion. This represented the first foray into what would become the Marketing Cloud. The purchase gave the company entree into the targeted email marketing business, which again would grow increasingly in importance in 2020 when communicating with customers became crucial during the pandemic.

Last year, just days after closing the Mulesoft acquisition, Salesforce opened its wallet one more time and paid $1.35 billion for ClickSoftware. This one was a nod to the company’s Service cloud, which encompasses both customer service and field service. This acquisition was about the latter, and giving the company access to a bigger body of field service customers.

The final billion deal (until we hear about Slack perhaps) is the $1.33 billion Vlocity acquisition earlier this year. This one was a gift for the core CRM product. Vlocity gave Salesforce several vertical businesses built on the Salesforce platform and was a natural fit for the company. Using Vlocity’s platform, Salesforce could (and did) continue to build on these vertical markets giving it more ammo to sell into specialized markets.

While we can’t know for sure if the Slack deal will happen, it sure feels like it will, and chances are this deal will be even larger than Tableau as the Salesforce acquisition machine keeps chugging along.


By Ron Miller

Materialize scores $40 million investment for SQL streaming database

Materialize, the SQL streaming database startup built on top of the open source Timely Dataflow project, announced a $32 million Series B investment today led by Kleiner Perkins with participation from Lightspeed Ventures.

While it was at it, the company also announced a previously unannounced $8 million Series A from last year that had been led by Lightspeed, bringing the total raised to $40 million.

These firms see a solid founding team that includes CEO Arjun Narayan, formerly of Cockroach Labs, and chief scientist Frank McSherry, who created the Timely Flow project on which the company is based.

Narayan says that the company believes fundamentally that every company needs to be a real-time company and it will take a streaming database to make that happen. Further, he says the company is built using SQL because of its ubiquity, and the founders wanted to make sure that customers could access and make use of that data quickly without learning a new query language.

“Our goal is really to help any business to understand streaming data and build intelligent applications without using or needing any specialized skills. Fundamentally what that means is that you’re going to have to go to businesses using the technologies and tools that they understand, which is standard SQL,” Narayan explained.

Bucky Moore, the partner at Kleiner Perkins leading the B round sees this standard querying ability as a key part of the technology. “As more businesses integrate streaming data into their decision making pipelines, the inability to ask questions of this data with ease is becoming a non-starter. Materialize’s unique ability to provide SQL over streaming data solves this problem, laying the foundation for them to build the industry’s next great data platform,” he said.

They would naturally get compared to Confluent, a streaming database built on top of the Apache Kafka open source streaming database project, but Narayan says his company uses straight SQL for querying, while Confluent uses its own flavor.

The company still is working out the commercial side of the house and currently provides a typical service offering for paying customers with support and a service agreement (SLA). The startup is working on a SaaS version of the product, which it expects to release some time next year.

They currently have 20 employees with plans to double that number by the end of next year as they continue to build out the product. As they grow, Narayan says the company is definitely thinking about how to build a diverse organization.

He says he’s found that hiring in general has been challenging during the pandemic, and he hopes that changes in 2021, but he says that he and his co-founders are looking at the top of the hiring funnel because otherwise, as he points out, it’s easy to get complacent and rely on the same network of people you have been working with before, which tends to be less diverse.

“The KPIs and the metrics we really want to use to ensure that we really are putting in the extra effort to ensure a diverse sourcing in your hiring pipeline and then following that through all the way through the funnel. That’s I think the most important way to ensure that you have a diverse [employee base], and I think this is true for every company,” he said.

While he is working remotely now, he sees having multiple offices with a headquarters in NYC when the pandemic finally ends. Some employees will continue to work remotely, but the majority coming into one of the offices.


By Ron Miller