Philadelphia data analytics startup dbt Labs is acquiring San Francisco-based Transform, a tech company founded by former data scientists at Airbnb. It marks the firm's first acquisition and is aimed at accelerating the development of one of its new products.
The two companies share a number of overlapping customers and data applications, which is part of what made the deal "a bullseye" for dbt Labs founder and CEO Tristan Handy.
Transform's data platform is centered on streamlining data points for clients into specific metrics like revenue, customer count and churn rate that are consistent across applications. Dbt is looking to fold that platform into its "Semantic Layer," which launched in October and works to define data metrics in much the same way. In doing so, dbt hopes to accelerate Semantic's development.
Financial terms of the deal were not disclosed. Transform, which most recently raised $24.5 million in January 2021, has 30 employees, and Handy said most, but not all, will be joining dbt.
The acquisition comes after a robust 2022 in which dbt tripled its revenue and doubled its headcount to 399, Handy said, though he declined to disclose specific revenue figures.
Dbt Labs has been one of Philadelphia's most successful startups since it was founded in 2016 as Fishtown Analytics. Over the years it has undertaken multiple funding rounds, including a $150 million Series C in 2021 and a $222 million Series D last February, which catapulted the unicorn's valuation to $4.2 billion.
The firm began conversations about a deal with Transform last year, but Handy had been acquainted with the company since 2021, he said. That was when the San Francisco firm, led by CEO Nick Handel, COO James Mayfield and software engineer Paul Yang, came out of stealth mode.
Prior to founding Transform, the trio held various roles at Airbnb. Handel was a product manager and data scientist at the travel booking company after a stint at BlackRock. Yang, a former Airbnb software engineer, and Mayfield, a former Airbnb director of product management, both previously held roles at Facebook. Handy said that Handel's background at Airbnb "really got people's attention" in the data industry when Transform launched.
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"The ideas that he and Transform popularized got a lot of people's brains whirring," Handy said.
As for the merger, Handy said that "there's just a very high bar you have to hit in order for it to be worth it." Transform was the first company that hit that bar and he's hoping the team's innovation will "bring new capabilities to Semantic Layer that our user base is excited about."
Dbt said its Semantic Layer has seen "industry-wide buy-in" since its launch five months ago, securing integration partnerships with 14 companies, but the acquisition of Transform will enhance and expand that.
Handy said he isn't eyeing additional acquisition opportunities presently but could be open to more in the future as the data analytics industry continues to evolve.
Instead, Handy's current focus is on integrating Transform and dbt's technologies. He said dbt is being "relatively conservative in the growth we are trying to achieve over the coming year, but that still means we have very aggressive growth targets in the current context."
Nearly 20,000 companies use dbt's platform, including Condé Nast, JetBlue, Nasdaq and Canva.
Bucking the trend, dbt's growth has continued in the face of macroeconomic headwinds and Handy is even hoping to grow the team throughout the year, he said, noting he has no immediate plans to raise additional funding.
"Certain times companies need to actually think about, OK, where's the next dollar of growth coming from?" Handy said. "At some point, maybe we'll be there too. But the answer for us has always been, and I think will continue to be, that we solve a very critical problem for businesses — and it is a very large problem. We are in no way anywhere close to bumping up against the edges of the current market. So we're very heads-down, focused on getting better at doing what we already do."
