Data Analytics Giant Alteryx Buys Rival Trifacta In $475M Deal

Alteryx (NYSE: AYX), a leading data science and analytics software provider to enterprises, has made a significant strategic acquisition. It’s buying Trifacta, a rival data analytics platform focusing on the cloud “internet servers.” Alteryx will pay $400mn in cash upfront for Trifacta and earmark $75mn in restricted stock units for the startup’s employees, summing up to $475mn.

Over time, Trifacta has raised around $220mn from VCs. Hence, a $400mn acquisition is reasonable, though not one that’ll deliver stellar returns to the startup’s investors, especially those who invested in the later stages. Trifacta’s investors include Greylock, BMW i Ventures, Accel, and tech giant Google.

  • Alteryx is buying Trifacta to accelerate its cloud strategy. Founded back in 1997, when cloud adoption was almost non-existent, Alteryx focused on providing data analytics software run on-premise to various enterprises. However, cloud adoption shot through the roof in the past decade, and Alteryx struggled to catch on. After pivoting to the cloud in recent years, the company has made several acquisitions to accelerate that pivot amid tough competition.

 

  • Trifacta is Alteryx’s third acquisition in four months; the other two were Hyper Anna, a data science platform, and Lore IO, a data modeling platform. Alteryx bought both startups last October for undisclosed sums. It appears that Trifacta is Alteryx’s biggest-ever acquisition.

 

  • Trifacta is a cloud platform enterprises use to prepare, manage, and analyze data. Its customers include tech giant Google, Bank of America, and pharma giant GlaxoSmithKline. Alteryx said Trifacta would contribute $20mn in revenue this year in an investor presentation.

 

  • Alteryx will fund the acquisition with cash from its balance sheet. The company reported having $1bn in cash at the end of Q3 2021 and will spend 40% of that on a startup expected to bring in just $20mn in revenue this year (a 20x multiple). That won’t happen if Alteryx doesn’t have big hopes for what’ll Trifacta add to its business.

 

  • The acquisition is expected to close in this year’s first quarter.

Along with the acquisition announcement, Alteryx also updated its financial projections. The company now expects revenue in Q4 2021 to be at or above the high end of the $163mn-$168mn estimate it previously gave. It’ll report the final results of that quarter by next month, February.

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