Fivetran Inc. and dbt Labs Inc., two venture-backed developers of data management software, today announced plans to merge.

The all-stock transaction is expected to create a company with nearly $600 million in annual recurring revenue. The company’s chief executive will be George Fraser, who currently holds the same title at Fivetran, while his dbt Labs counterpart Tristan Handy is set to take on the role of president. The merger is expected to close within a year.

Fivetran operates a cloud platform that companies use to move data between their applications. A manufacturer, for example, could have the platform stream equipment health logs from three different factories to a centralized cloud-based analytics environment. Fivetran says that its software can move more than 500 gigabytes of data per hour.

The platform provides several ways of syncing information between applications. A company may configure Fivetran such that deleting a record in a source system removes it from the destination system. Furthermore, the platform can keep a log of how each record changed over time. The ability to track file modifications eases tasks such as finding the source of accuracy issues.

While Fivetran focuses mainly on helping companies move their data, dbt Labs’ namesake tool makes it possible to edit that data. A retailer, for example, could use Fivetran to load sales logs into a data warehouse and dbt to remove duplicate entries. The two companies have more than 1,500 joint customers. 

“As dbt moves to fill some holes in organizations’ data strategies and platforms around metadata and model management, Fivetran remains the de facto data movement platform,” said Rob Strechay, managing director and principal analyst at theCUBE Research. “Both pieces are becoming more critical as data platforms, AI and regulation meet use cases requiring a clear ROI. Metadata and efficient data movement are at the core of AI.”

When a company streams records from multiple applications into a centralized analytics environment, the individual records often use different file formats. Developers can use dbt to organize files into a consistent format. The software is also capable of detecting data quality issues such as outdated and duplicate records.

Alongside its core data transformation features, dbt provides a set of observability tools. The software can generate an alert when an issue emerges in one of the automated workflows a company uses to process its data. A cost monitoring dashboard tracks those workflows’ infrastructure usage.

Some dbt editions ship with an artificial intelligence assistant called dbt Copilot. According to the company, it enables developers to generate data transformation scripts using natural language prompts. The tool also automates related tasks such as creating code documentation.

The core features of dbt are included in an open-source project called dbt Core. There’s also a more capable, source-available version called dbt Fusion that offers faster performance and an expanded set of capabilities. Fivetran plans to continue offering both projects under their current licenses, as well as actively maintain dbt Core.

“This space has continued to evolve as Salesforce announced its intent to acquire Informatica,” Strechay said. “This combination with Fivetran and dbt Labs has the potential to be the next generation.”

Image: dbt Labs