Data integration platform Hightouch has raised $40 million in a series B round of funding led by Iconiq Growth, a venture capital firm with a notable roster of enterprise companies in its portfolio, including Zoom, Datadog, Snowflake, and GitLab.
Companies are drowning under a deluge of data, with enterprises using 288 different SaaS apps on average — each representing a potential data silo. And this is why a swathe of new tools and technologies have emerged to help combine disparate data pools to unlock valuable insights.
“Since companies are using so many different SaaS tools nowadays, there is a stronger need for a central place to combine sales, marketing, and product data from these tools to get that fabled 360 view of a customer,” Hightouch cofounder Kashish Gupta told VentureBeat. “The data warehouse is the only place where this is possible.”
Data in motion
The modern data technology stack includes data ingestion tools such as Fivetran, a company that recently raised $565 million at a $5.6 billion valuation to enable companies to “extract, transform, and load” (ETL) their data from sources (e.g., databases or SaaS apps) and into their data warehouse (e.g., Snowflake or BigQuery). That allows a sales team that uses countless SaaS applications spanning product analytics, marketing, customer support, and CRM tools to pool their data to uncover purchasing trends, for example.
Hightouch does the opposite of this — it helps companies get their data out of the warehouse and into an application in a process it refers to as “reverse ETL.” Other notable players in the space include Census, which recently closed a $16 million investment.
Reverse ETL, essentially, involves “copy and pasting” data between tables. So if a company wants to shift data from Zendesk into Salesforce to figure out how much support specific customers are requesting through Zendesk, they would use an ETL tools such as Fivetran to move the data into the warehouse, and then use Hightouch to get that data into Salesforce.
“There has been a key technology shift with the adoption of data warehouses — modern cloud data warehouses like Snowflake have very cheap storage, and you don’t need to pay for computing resources unless you’re actually running a query,” Gupta explained. “Warehouses have also gotten much faster, so it is practical to use them to power timely business workflows.”
Hightouch counts dozens of integrations out-the-box, spanning most of the common warehouse sources such as BigQuery, Snowflake, and Databricks, and common enterprise applications including Anaplan, HubSpot, Mixpanel, Salesforce, Stripe, and Jira. The user can then set a synchronization frequency so that the destination is automatically kept up-to-date.
“Everyone needs access to data, but to get that valuable data you [traditionally] have to rely on your engineering team,” Gupta said. “Hightouch gives everyone access to data in their tools without having to rely on any code or engineers.”
Data integration landscape
It’s a been a busy year in the broader data integration space. Matillion recently closed a $150 million round of funding at a $1.5 billion valuation, while Dbt Labs secured $150 million in funding, also at a $1.5 billion valuation. Elsewhere, GitLab spun out a new open source ELT (extract, load, transform) platform called Meltano as an independent company.
Founded in 2018, Hightouch had previously raised around $14 million, the bulk of which arrived via a series A round announced just a few months ago. Its latest cash injection apparently came about after its investors conducted a round of interviews with Hightouch customers and found a net promoter score (NPS) of 9.5/10.
“Investors conducted interviews to learn more about the reverse ETL space and competitive landscape — many investors began these interviews even before speaking to us, because they wanted to better understand why data startups are experience such rapid growth,” Gupta said. “On the business side, the customer feedback was that reverse ETL is here to stay, and that there is willingness to pay for the solution. Many customers even said they could not live without the solution.”
Although it only launched to the public this year, Hightouch now claims hundreds of B2C and B2B customers including Nando’s, Plaid, Kong, and Survey Monkey, and has gone from just 4 employees at the start of 2021 to 40 today.
For its series B round, the San Francisco-based company — which now has a post-money valuation of $450 million — attracted a slew of institutional and angel investors, including Amplify, Bain, Y Combinator (YC), Afore, and Apache Airflow creator Maxime Beauchemin.
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