Talend, whose open source narrative focused on broadening the ETL market, is now seeking to add a new entry level cloud service tier to its portfolio. It is buying Stitch, a 2-year old Philadelphia-based spinoff of RJ Metrics for $60 million in cash.
Stitch offers a cloud-based self-service offering that automates data ingestion pipelines into the cloud. It's an emerging space where the closest competitors are Alooma and Fivetran, but also where Confluent and StreamSets play.
In its two years, Stitch has already built a customer base exceeding 1000 customers. The service was designed to offer a simpler alternative for acquiring and ingesting data to cloud-based data warehouses. As a process requiring ETL, Stitch focuses on automating the processing of extracting, moving, and loading data to cloud data warehouse targets. Significantly, what it doesn't do is the transform part -- the operable notion is that the task would be performed inside the database, taking advantage of the inexpensive compute cycles available in cloud-based services.
For Talend, the acquisition is about adding a new entry-level tier that lowers the barrier for customers, expanding its addressable market. With Tableau having proven the viability of self-service in analytics, demand has grown for tooling that reduces or eliminates the need for IT personnel. Cloud-based analytics services such as Power BI and Amazon QuickSight have further fueled expectations. The emergence of data preparation tools, which replace the need for understanding database schema with simple Excel-like spreadsheet interfaces for data transformation have further fueled expectations. Stitch itself takes care of all the complications of running the data pipeline, minus the transformation operations.
On day one, the idea would be for Talend's transformation tools to pick up where Stitch leaves off. But longer run, the real goal of the acquisition is for Talend to apply the expertise of the Stitch team -- which will remain in Philadelphia where it's always sunny -- to applying their design thinking to some of the flagship products. In that sense, it could become sort of a reverse acquisition, where the skills of the 30-person acquired company rub off on the parent that numbers over a thousand in staff. With deeper pockets, Talend intends to expand the Stitch team.
Talend has not yet announced a closing date for the deal.