Databricks has agreed to acquire Arcion, an enterprise data company, for about $100 million, including incentives, CEO Ali Ghodsi told CNBC ahead of an official Monday announcement.
Databricks' chief product is a data analytics tool, powered largely by an artificial intelligence method called deep learning, but there's no data for the platform to analyze when a client signs up, Ghodsi said. Once Databricks integrates Arcion's technology, it should be much easier for clients to add their data from software systems such as Salesforce, Workday and Oracle, he said. Databricks had previously invested in Arcion's $13 million Series A round in February 2022.
The acquisition comes after Databricks announced a $500 million funding round in September at a valuation of $43 billion. Arcion is Databricks' first acquisition since acquiring MosaicML, an AI infrastructure startup specializing in training large language models, for $1.3 billion. The company plans to integrate Arcion's tech into MosaicML, making it "the data source that feeds Mosaic" when a client wants to use the tool to build out their own AI models, Ghodsi said.
Databricks is widely seen as a top contender for an initial public offering in the near future.
"We are focused on continuing to build a successful, sustainable business for the long run," Ghodsi told CNBC. "An IPO will be a milestone, but we're focused on satisfying the intense demand from customers, and ensuring their long term success."
The company's CIO Summit in March sparked the acquisition idea, Ghodsi said. It's part of Databricks' AI push, and partly inspired by the tech sector's growing interest in generative AI, which can require a lot of training data.
"I asked them, 'What do you want us to work on? And what's your top priority?'" Ghodsi recalled. "Everybody said, 'Just deal with the [data] ingestion problems — can you just solve the ingestion problem for us?'"
Arcion was founded in 2016 by Rajkumar Sen, a former employee at Oracle, and Miryana Joksovic, a former startup advisor. The company has raised more than $18 million and its last known valuation was $65 million, according to Pitchbook.
Databricks plans to increase Arcion's staffing post-acquisition, Ghodsi added.
"We think we can make a lot of revenue on this particular acquisition," Ghodsi said. "This is one where we think it's going to be revenue-accretive."
