Chapel Hill startup CData brings in $140 million from DC investment firm
Chapel Hill software maker CData, which helps companies connect their data across a variety of cloud networks, has raised $140 million in a Series B investment, one of the largest rounds of capital raised by a Triangle startup this year.
The investment comes from the Washington, D.C., growth equity firm Updata Partners, which had previously invested $20 million in the company last year.
Founded in 2014, CData has grown rapidly thanks to a huge migration by businesses into cloud computing, the company’s CEO Amit Sharma told The News & Observer.
Before the rise of cloud computing, most companies stored their data on a centralized server. Now that information can be stored in on-premise servers as well as at a host of different cloud storage providers.
“Most businesses have moved to cloud applications very strongly,” Sharma said in a video interview. “All their customer data and all their transaction data are online. But connecting these systems is a lot harder than it used to be. And that’s where CData specializes.”
The pandemic has accelerated investments in cloud applications, Sharma added, a trend he doesn’t expect to slow down soon.
“There’s so much investment in this space. We are seeing more customers interested in it,” he said. “I think we’re still in the early stages of what the cycle might look like.”
CData says more than 10,000 companies are using its software in some way — though its relationships with those companies varies. For example, the company worked with Office Depot to move its data to a cloud-based platform run by the company Snowflake. CData helped them move the data, while still being able to connect it to its existing analytics software.
“We like to joke among ourselves that we are the plumbing” of the internet, Sharma said. “We’re not a very well known business — most people don’t see what’s happening behind the scenes to make the data move. But we’re the plumbing behind what enterprises are doing day in and day out.”
It has proven to be a good business for CData.
Sharma said his company has been cash-flow positive for several years, and has been growing revenues by 50% per year.
He added that the company didn’t need to raise money, but did so because it wanted more flexibility to invest in growth opportunities. “We might use this capital for an acquisition,” he said.
CData and Updata declined to reveal exact revenue numbers or CData’s valuation.
Carter Griffin, a general partner at Updata, said CData still has plenty of room to grow, especially in raising awareness of its brand.
“The step that we hope to help them take is to make it become more of a name that other businesses recognize,” Griffin said.
When asked whether he believes the company has the potential to go public one day, Griffin said: “I absolutely do.”
“Whether or not the company decides to go public is another question, altogether,” he added. “But I certainly think that’ll be an option in the future.”
Griffin said he believes CData should use the new capital to add employees who can conduct research into new product development and expand its ability to serve customers.
He said CData employs around 200 people today, across its offices in Chapel Hill, Europe and Asia. About half of the team is located in the Triangle.
“We are probably going to take that out another 50% this year, so adding maybe 100 people to the payroll,” he said.
Most of CData’s leadership team is based in the Triangle and has ties to either UNC-Chapel Hill, Duke University or N.C. State University.
Sharma immigrated to the Triangle to attend N.C. State and later got his MBA from Duke.
“The Triangle is a great place to be,” Sharma said. “Hiring has gotten tougher, but for the right type of people, you can find them. We find great talent from N.C. State, from UNC and from Duke.”
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
This story was originally published December 16, 2021 at 8:00 AM with the headline "Chapel Hill startup CData brings in $140 million from DC investment firm."
