UPDATED 15:00 EDT / APRIL 04 2024


Automated data transformation startup Coalesce closes on $50M funding round

Data transformation startup Coalesce Automation Inc. has revealed how it is planning to scale its business, unveiling an ambitious roadmap to coincide with its biggest funding round yet.

The company said today it has raised $50 million via a Series B funding round, bringing its total amount raised to more than $81 million. The round was led by Industry Ventures and existing backer Emergence Capital, and saw the participation of 11.2 Capital, DNX Ventures, GreatPoint Ventures, Hyperlink Ventures, Next Legacy Partners, Snowflake Ventures and Telestra Ventures.

Coalesce has been around for just over two years, having launched in January 2022 on a mission to solve one of the main bottlenecks in the data analytics supply chain. The company, which raised $26 million in September 2022, has created a platform that automates the tasks involved in data transformation, where raw information is made ready for analysis. This is a multistage process that involves cleansing, modeling and documenting data to ensure that it’s clean and ready to be fed into business intelligence and analytics applications.

The startup’s platform integrates with Snowflake Inc.’s cloud data warehouse, and is designed to accelerate those data transformation processes. It presents users with a simple, intuitive graphical user interface through which they can visualize all of the data they have within Snowflake. From there, it’s relatively simple to select and process the data that needs to be modeled, governed and documented.

According to Coalesce, data transformation is one of the main challenges in data analytics supply chains, because it has traditionally been performed manually by data scientists and engineers. As a result, it has always been much slower than the other steps in the data analytics stack.

With Coalesce, data transformation isn’t nearly as slow. Users can choose from a variety of customizable templates for frequently-used transformations and automatically generate standardized Structured Query Language commands for exploring their datasets. The platform collects, manages and uses column- and table-level metadata to automate the data transformation processes. This is made possible by Coalesce’s column-aware architecture, which wraps data change management within a user-friendly UI with comprehensive data lineage and deployment functions.

The unique architecture means users can transform, track and understand their data at a much finer level of granularity, the startup says, allowing them to surface context around data lineage and see how it evolves as it progresses through analytics pipelines.

Explosive growth

Coalesce says it has enjoyed rapid growth over the last 12 months, with its annual recurring revenue growing by more than 300% in the fiscal year ending in January 2024 from the year prior, though it didn’t provide absolute numbers. Coalesce co-founder and Chief Executive Armon Petrossian said today’s funding round was made possible by that explosive growth.

In addition to its impressive growth, the startup has won various industry accolades and introduced a number of enhancements to its platform, including new collaborative features for Snowflake’s Data Cloud that were announced last June. More recently, in January, it made a statement of intent regarding its ambitions to be recognized as a major player in the big data industry with the launch of its Data Transformers community. This is a new, open program that aims to bring together data professionals from across the world, encouraging them to research and collaborate on ways to improve and simplify data automation processes, with a focus on data transformation.

Although it has grown rapidly, there is plenty of work for Coalesce to do if it’s to muscle in on the major players in the data integration industry, said Doug Henschen, an analyst with Constellation Research Inc. He pointed out that its main competitors, such as Fivetran Inc., Matillion Ltd. and dbt Labs Inc. currently enjoy much broader adoption. Other players, such as Airbyte Inc., Informatic LLC and QlikTech International AB are also going after the same customers, he added.

“There’s always room for innovators in the data ecosystem, but Coalesce will need to keep sharing success stories of notable reference customers, and it needs to get more traction in other ecosystems, outside of Snowflake’s,” he said.

Today’s funding round is by far and away the company’s biggest, and it will use the inflated war chest now at its disposal to grow its business in three ways. Its post-Series B roadmap reveals a plan to enhance customer satisfaction by delivering improvements in its software’s scalability and performance.

In addition, it’s also planning to add its first artificial intelligence features, which will make its platform more accessible to a broader range of users, including nontechnical people. And it plans to focus on growing awareness of its platform with targeted marketing initiatives to Snowflake customers.

Image: WangXiNa/Freepik

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