Databricks has announced its acquisition of Arcion, an enterprise data company, in a deal valued at approximately $100 million, including performance-based incentives. CEO Ali Ghodsi shared this information with CNBC prior to the official announcement scheduled for Monday.
Databricks primarily offers a data analytics tool driven by deep learning, an artificial intelligence technique. Ghodsi emphasized that when clients initially sign up for Databricks, there is no data available for the platform to analyze. However, with the integration of Arcion’s technology, clients will find it considerably easier to incorporate their data from software systems like Salesforce, Workday, and Oracle. Notably, Databricks had previously participated in Arcion’s $13 million Series A funding round in February 2022.
This acquisition follows Databricks’ September announcement of a $500 million funding round at a valuation of $43 billion. Arcion marks Databricks’ first acquisition since acquiring MosaicML, an AI infrastructure startup specializing in training large language models, for $1.3 billion. The company intends to incorporate Arcion’s technology into MosaicML, positioning it as the data source for Mosaic when clients wish to leverage the tool for building their own AI models, as outlined by Ghodsi.
Databricks is widely regarded as a strong contender for an imminent initial public offering (IPO). Ghodsi emphasized the company’s focus on building a sustainable, successful business for the long term, emphasizing customer satisfaction as a top priority. While an IPO remains a milestone on the horizon, Databricks is committed to meeting customer demands and ensuring their long-term success.
The idea for this acquisition was sparked during the company’s CIO Summit in March, aligned with Databricks’ AI initiatives. The decision was partly motivated by the tech sector’s increasing interest in generative AI, which often necessitates substantial training data.
Arcion, founded in 2016 by Rajkumar Sen, a former Oracle employee, and Miryana Joksovic, a former startup advisor, has raised over $18 million in funding, with its last known valuation at $65 million according to Pitchbook.
Databricks intends to expand Arcion’s workforce following the acquisition, with Ghodsi expressing optimism about the revenue potential of this strategic move. Ghodsi stated, “We believe this acquisition has the potential to significantly increase our revenue and become a revenue-accretive venture.”