Databricks' $2 Billion Acquisition of Tabular: A Strategic Move in the Battle Against Snowflake
In a bold move, analytics and AI giant Databricks recently acquired Tabular for nearly $2 billion, despite the startup only generating $1 million in annual recurring revenue. This acquisition, as reported by Bloomberg, was driven by the fierce competition between Databricks and Snowflake, resulting in an impressive exit multiple.
Tabular, backed by Altimeter Capital, Andreessen Horowitz, and Zetta Venture Partners with over $30 million in funding, was acquired just three years after its founding. The startup's valuation was closely tied to Apache Iceberg, an open-source table format created by its founders during their time at Netflix. Tabular quickly became a valuable asset in the ongoing battle between Databricks and Snowflake, with reports of Databricks employees supporting their CEO's criticisms of Snowflake on social media.
Snowflake, on the other hand, has seen a 36% decline in its stock price this year, with a market cap of around $43 billion - the same as Databricks' current valuation. The company's reputation took a hit following a data breach affecting a large number of AT&T customers in July.
In conclusion, Databricks' strategic acquisition of Tabular highlights the intense competition in the analytics and AI market, particularly between Databricks and Snowflake. This move not only strengthens Databricks' position but also underscores the challenges faced by Snowflake. Investors should keep a close eye on these developments as they could have a significant impact on the financial performance of both companies.