Databricks Acquires Tabular for Nearly $2 Billion Amid Competitive Tensions with Snowflake
- Databricks purchased Tabular for a whopping $2 billion in June.
- Despite Tabular's modest annual revenue of $1 million, the acquisition was substantial.
- The acquisition will likely have a significant impact on the analytics and AI industry.
In a surprising move, analytics and AI leader Databricks has acquired the startup Tabular for nearly $2 billion, despite Tabular generating only $1 million in annual recurring revenue. This acquisition, reported by Bloomberg, highlights the intense competition between Databricks and rival Snowflake, which may have driven up the exit multiple significantly. Founded just three years prior to the acquisition, Tabular had secured over $30 million in funding from notable investors including Altimeter Capital, Andreessen Horowitz, and Zetta Venture Partners. The startup's valuation was closely linked to its development of Apache Iceberg, an open-source table format that its founders created during their tenure at Netflix. This connection to a widely adopted technology likely contributed to the high acquisition price. The acquisition of Tabular appears to have turned the startup into a strategic asset in the ongoing rivalry between Databricks and Snowflake. Reports indicate that some Databricks employees were encouraged to engage with their CEO's LinkedIn posts that criticized Snowflake, suggesting a concerted effort to bolster the company's public image in the competitive landscape. As the analytics and AI sectors continue to evolve, this acquisition underscores the lengths to which companies will go to secure technological advantages and market positioning, even at steep financial costs. The implications of this deal may resonate throughout the industry as Databricks and Snowflake vie for dominance.