Charlotte-based Truist Financial Corp. did not set out to buy Durham data technology firm Zaloni.
Tracy Daniels, chief data officer for Truist, was considering ways the firm could use the company's analytics software. But while her team was discussing the firm's technology, the venture arm of Truist was quietly circling in on a buyout.
Both discussions merged, and on Monday Truist announced it was acquiring assets of the 15-year-old company founded by entrepreneurs Ben Sharma and Bijoy Bora in 2007. Sharma is part of a team of 20 that is coming over to Truist with the deal, which includes the entire Zaloni Arena platform, used by Fortune 100 companies to securely deliver data for advanced analytics and AI use cases.
It's unclear what the deal means for the future of Zaloni. Truist isn't talking about the financial details and Sharma wasn't available for comment Monday.
The company had nearly 50 local employees pre-pandemic, but just 20 are joining Truist, according to the bank.
The deal does signal continued interest in Triangle innovation by the banking sector, which is good news for entrepreneurs looking for an exit.
Chris Marinac, director of research for bank industry watcher Janney Montgomery Scott, expects to see more of these deals as banks look for ways to innovate. And North Carolina, which has a slew of fintech startups, could be a benefactor.
"I believe that is a fair expectation for the rest of 2022 and also in 2023," Marinac said of M&A. "More data deals are likely, most are small in size relative to the [buying bank's] market capitalization."
Truist has been upping its M&A game. The bank acquired fintech startup Long Game in May – the San Francisco-based firm built a gamified finance mobile app intended to help people manage their finances. Last year, Truist bought Florida-based Service Finance Company, a point-of-sale firm for the home improvement industry.
In July, Truist CEO Bill Rogers told investors the bank is “increasingly optimistic about the performance and the potential of our increased investment and focus on digital and technology.”
While Charlotte, with the headquarters of both Truist and Bank of America (NYSE: BAC), has long been a fintech leader, eastern North Carolina has been building a fintech reputation. Wilmington is where entrepreneurial bank Live Oak is located, as well as its tech spin-off, nCino (Nasdaq: NCN), which develops a banking platform used by several big names in the industry, including Truist.
The Triangle is also a clear leader in analytics – both in terms of startups and talent pool thanks to firms such as Cary-based SAS Institute and IBM (NYSE: IBM), which has one of its largest campuses in Research Triangle Park.
When asked if additional data technology deals will be part of Truist's strategy, Daniels said only that her team is “thrilled” with the latest investment “and really are excited about the future of data analytics.”
A 15-year history in Durham
Zaloni launched in 2007 in stealth mode.
Over time, it was able to score large Fortune 100 customers, wins Sharma said were driven by both its innovation and its cost-effectiveness compared to other technologies “because it runs on commodity hardware.”
Zaloni dealt in what’s called “data lakes.”
The storage “lakes” it develops hold a huge amount of raw data in its native format until it’s needed.
“You can onboard various types of data, whether it’s structured data, data from sensors, data from social media,” Sharma said in 2016. “You can build user cases rapidly. … It’s a scaleable platform.”
And investors made big bets, such as California’s Sierra Ventures, which led Zaloni’s $7.5 million fundraise in 2016, and Baird Capital.
Zaloni last raised funds in 2020, just under $9.6 million in equity, according to a securities filing. Altogether, filings show the company has raised about $18.6 million.
The Truist deal, according to the bank, is for Zaloni's core product management, architecture and engineering team. An offshore team will remain in India and is not joining Truist.
