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November 7, 2018

Talend Buys Stitch for $60M

Alex Woodie

Stitch, a provider of integration services for loading cloud data warehouses, was snapped up by ETL software developer Talend today in a $60 million deal.

Stitch is a relatively small firm that was spun out of RJMetrics when that firm was acquired by Magento in 2017. Just over a year later, the 33-person company racked up more than 900 customers for its cloud data warehouse integration service.

According to CMO Ashley Stirrup, the Philadelphia, Pennsylvania company has been so successful because it made data integration “dirt simple.” “It’s really just a simple Web service for getting data into cloud data warehouses,” Stirrup says. “They really focused on making the whole thing a self-service process.”

The availability of sophisticated but easy-to-use cloud warehouse offerings from AWS, Google, Snowflake, and Microsoft is transforming the market for data analytics, and Stitch has been riding that wave with its own service, which is predominantly aimed at moving data from other cloud applications, such as Marketo and Salesforce, into the cloud warehouses.

“We’re seeing such explosive growth from these four cloud DW vendors and it’s changing the market,” Stirrup tells Datanami. “It’s expanding the market with so many more companies now see this kind of data warehousing is accessible to them than ever before. They’re all doing a great job of making it a put-in-your-credit-card-and-start-using-it kind of model.

“We absolutely believe that data integration needs to follow that path as well, and just make it a super simple and online,” he continues. “When I need more I’ll get more, but let me start out with the basics and make it really fast and easy to get my data into these data warehouses. We felt it was critical to invest in that.”

Talend already offered a lightweight ETL offering to go along with its enterprise-strength ETL tool, but it lacked an entry-level offering like Stitch’s. Stirrup acknowledges that Talend could probably have built its own service like Stitch’s. But the decision-makers at Talend were evidentially impressed enough with both Stitch’s product and its sales and support process that , they ponied up $60 million to buy it.

Data prep work, including integration and transformation, can take up 60% or more of an engineer’s or analyst’s time. Companies like Stitch and its competitors Alooma and Fivetran have attempted to simplify the process to the point where users don’t need formal training to use the products. They’re just self-explanatory, according to Stirrup.

“They don’t even ask for a phone number when you sign up for their service,” Stirrup says of Stitch. “They have been religious about not picking up the phone. When they see customers having problems, they say ‘How do we fix the product?’ or ‘How do we fix the documentation?’

“It’s this hyper-optimzed solution for frictionless sales,” he continues. “We see this as the future of Talend. The future of the whole IT market, frankly, is how do you simplify all these things. How do you make it so somebody doesn’t have to pick up the phone.”

While Stitch sells directly to end-users, Talend still employs a team of salespeople to cater to enterprises, and doesn’t plan to get rid of them anytime soon. Instead, Talend sees Stitch occupying the low-end of the ETL ladder, but customers can easily move up to more sophisticated ETL tools as their needs evolve.

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