Databricks reportedly paid $2 billion in Tabular acquisition

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Image Credits: Andriy Onufriyenko / Getty Images

Analytics and AI giant Databricks reportedly paid nearly $2 billion when it acquired Tabular in June, a startup that was only doing $1 million in annual recurring revenue, according to Bloomberg. That’s a pretty outrageous exit multiple, and it was purportedly fueled by a battle between Databricks and Snowflake.

Tabular had over $30 million in funding, backed by Altimeter Capital, Andreessen Horowitz and Zetta Venture Partners, when it was acquired just three years after it was founded. Tabular’s valuation was tied to Apache Iceberg, a popular open source table format that the startup’s founders created while at Netflix. The startup quickly became an expensive pawn in the war between Databricks and Snowflake. In fact, some Databricks employees were reportedly asked to like or share their CEO’s LinkedIn posts dunking on Snowflake, according to Bloomberg.

Snowflake’s stock price has fallen 36% this year, with its market cap of roughly $43 billion equal to Databricks’ current valuation. It didn’t help that Snowflake was linked to a massive data breach affecting “nearly all” of AT&T’s customers in July.

Databricks reportedly paid $2 billion in Tabular acquisition

by with No Comment Tech

AI render

Image Credits: Andriy Onufriyenko / Getty Images

Analytics and AI giant Databricks reportedly paid nearly $2 billion when it acquired Tabular in June, a startup that was only doing $1 million in annual recurring revenue, according to Bloomberg. That’s a pretty outrageous exit multiple, and it was purportedly fueled by a battle between Databricks and Snowflake.

Tabular had over $30 million in funding, backed by Altimeter Capital, Andreessen Horowitz and Zetta Venture Partners, when it was acquired just three years after it was founded. Tabular’s valuation was tied to Apache Iceberg, a popular open source table format that the startup’s founders created while at Netflix. The startup quickly became an expensive pawn in the war between Databricks and Snowflake. In fact, some Databricks employees were reportedly asked to like or share their CEO’s LinkedIn posts dunking on Snowflake, according to Bloomberg.

Snowflake’s stock price has fallen 36% this year, with its market cap of roughly $43 billion equal to Databricks’ current valuation. It didn’t help that Snowflake was linked to a massive data breach affecting “nearly all” of AT&T’s customers in July.

Filing shows Salesforce paid $419M to buy Spiff in February

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The Salesforce building near Bryant Park in New York City

Image Credits: Alexi Rosenfeld / Getty Images

Salespeople live and die by commissions, which typically form a big chunk of how they are paid. It’s no surprise, then, that Salesforce paid a premium to buy a platform that helps its customers manage commissions more easily.

Several months ago, Salesforce bought Spiff to help companies build out and manage incentive-based compensation schemes. Salesforce’s 10-Q filing with the SEC early on Thursday finally revealed the price it paid: $419 million all-in.

That price, described as “acquisition date fair value,” includes $374 million in cash, the filing said.

The 10-Q followed Salesforce’s quarterly results, which it reported on Wednesday. The company’s stock dropped by some 16% on Wednesday after its quarterly revenue came in below analysts’ expectations for the first time in about 18 years (it last reported a revenue miss in 2006). The company recorded quarterly revenues of $9.13 billion, below analysts average estimates of $9.15 billion, per Yahoo Finance.

Given that context, an acquisition to drive more revenues down the line is not a surprise.

The $419 million price tag is a notable hike for Spiff. The startup was last valued, according to PitchBook, at $260 million as recently as May 2023 when it raised $50 million.

That was just seven months before Salesforce and Spiff announced their deal in December 2023. The deal closed in February 2024, according to the 10-Q.

Based out of Salt Lake City, Utah, Spiff had raised around $110 million in total from investors including Salesforce, Lightspeed Venture Partners, Norwest Ventures, and a number of notable backers such as UiPath’s founder Daniel Dines, and Hanno Renner, the head and founder of HR startup Personio.

Spiff’s acquisition and the deal’s value are notable because they are very much a sign of the times.

Such a strong uptick in value close on the heels of a fundraise can be seen as a signal of how stronger companies are still commanding good prices despite wider pressure on startups.

The IPO window is still mostly closed for many mature startups, leading to a tougher funding market overall. And when we combine that with tough economic conditions that have seen companies fail to meet growth targets, we’re seeing struggling startups having to settle for down-rounds, conducting fire sales, and in the worst-case scenarios, sinking in the deadpool.

That’s not the case with Spiff. At the time of its last funding round a year ago, the company said its customer base had doubled to 1,000, and its revenue had risen 100% in the last year. The company was founded during the pandemic, and it says its revenue has increased 800% since then.

More recently, Spiff has been leaning into buzzy areas that Salesforce likely wants to capture: AI, and no-code, self-service solutions.

Specifically, Spiff last year launched an AI-based, no-code, self-service toolset that its customers could use to build sales commission schemes without needing developers. Extra flexibility becomes a priority when the economy is not at its strongest, and that’s where Spiff was aiming its new technology.

“We’ve seen a lot of commission plans change,” Jeron Paul, Spiff’s founder and CEO, told TechCrunch in an interview last year. “Incentives end up driving a lot of the behavior of your go-to-market motion, so when you hit recessions, and whatever we’re in right now, that go-to-market motion changes a lot, which means your commission plans change a lot.”

To that end, Salesforce said it is recording $323 million of goodwill covering “assembled workforce and expanded market opportunities.”

Salesforce also noted in the 10-Q that it is ascribing $52 million in “intangible assets” in the value of the Spiff deal, which includes nine years of life for the startup’s existing technology, and a further five years for its existing customer book.

Vision Pro headset

Over half of Vision Pro-only apps are paid downloads, far more than wider iOS App Store

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Vision Pro headset

Image Credits: Brian Heater

Apple’s Vision Pro offers consumers a new way to interact with apps via spatial computing, but it also offers app developers a way to generate revenue without subscriptions. According to a recently released report from app intelligence firm Appfigures, over half of Vision Pro-only apps (52%) are paid downloads — a surprising percentage given that across the wider App Store, only 5% of apps monetize this way.

In addition to the large group of paid downloads, 35% of Vision-only apps didn’t monetize through the App Store, and 13% offered subscriptions.

The analysis examined all the apps optimized for the Vision Pro, including the more than 700 apps optimized for the new device, meaning those apps that are Vision Pro-only and others where the developer optimized an existing app to work on Apple’s VR/AR headset specifically. However, it did not include the roughly 1.2 million iOS apps that work on the Vision Pro, but weren’t modified by their developers. 

Including iOS apps that were modified to include a native Vision experience, only 17% were paid downloads, and 58% were monetized with subscriptions.

Appfigures tells TechCrunch a further analysis of all apps made for the Vison Pro indicates the apps have an average price of $5.67, with the highest price at $98 (for an interactive periodic table of elements). Most apps are priced at $9.99 or below. And if you bought all the paid apps, it would cost you $1,089.07 — which is still less than the cost of the device itself, which starts at $3,499.

The takeaway here is that app developers who are embracing the Vision Pro with unique, native experiences built just for Apple’s AR/VR platform are returning to the paid download monetization model. That could have invited more opportunities for discovery as well, but unfortunately, Apple has now just removed all Vision Pro apps from the top charts on the App Store. That will make it more difficult to track developers’ success and for consumers to discover new apps since the Vision Pro’s App Store has no categories or top charts, as on other platforms.

Noted one Vision Pro developer, Michael Sayman, his News Ticker app for the new device quickly became the No. 3 app among all paid news apps for iPhone and Vision Pro in a matter of days, and then became No. 1 in the News category.

“The window of opportunity here is nuts,” he told TechCrunch shortly after the app’s launch, adding that the app has since seen thousands of downloads. But with Apple’s removal of Vision Pro apps from the Top Charts, Sayman says he’ll only return to Vision Pro development after Apple fixes search and adds more discovery options.

Meanwhile, Juno, a Vision-only YouTube client for the Vision Pro from Apollo developer Christian Selig, also broke into the top 10 in the Photo & Video category shortly after the device’s launch.

Remarked Selig on X, “Juno has officially paid for the price of my Vision Pro, who said developing early on this platform wouldn’t be worth it?”

A return to paid apps could appeal to developers who want a new way to monetize without gouging customers with high-priced subscriptions.

Over the years, Apple pushed app developers to adopt monetization models involving free apps with in-app purchases and subscriptions as those models directly benefited Apple, due to the 15% to 30% commission it takes on in-app sales. The shift was part of Apple’s broader strategy to become a services-driven business. That is, instead of simply encouraging consumers to buy new iPhones and Macs and other Apple devices, the company also wanted to generate ongoing revenue from those devices through services like AppleCare, Apple TV+, Apple Music, Apple Arcade, iCloud, Apple News+, Apple Fitness+, advertising and, of course, App Store purchases, among other things.

These ongoing revenue streams help Apple weather changing market conditions around iPhone sales — like the 13% decline in sales in China the company reported in the first quarter, for example. At the same time as iPhone sales in that key market dropped, Apple’s services division grew 11% from the prior quarter to reach $23.11 billion.

However, for consumers, the growth of subscriptions has been a mixed bag.

It’s meant that even simpler apps now demand ongoing payments and previously free, ad-supported apps now charge. Plus, the subscription market opened the door to scammers who take advantage of the ease of in-app purchases to trick users into buying subscriptions by using confusing user interface designs and the promises of free trials which convert to paid after mere days, among other misleading tactics. The App Store soon filled with complaints about sneaky and overpriced subscriptions.

Given there seems to be an opportunity for developers to generate revenue through one-time purchases on the Vision Pro, it’s odd that Apple would have pulled these apps from its Top Charts, where they could have found new customers. How that will impact developer interest in the revenue model and device itself still remains to be seen.

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Should artists be paid for training data? OpenAI VP wouldn't say

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SXSW Peter Deng openai vp

Image Credits: SXSW

Should artists whose work was used to train generative AI like ChatGPT be compensated for their contributions? Peter Deng, VP of consumer product at OpenAI — the maker of ChatGPT — was loath to give an answer when asked on SXSW’s main stage this afternoon.

“That’s a great question,” he said when SignalFire venture partner (and former TechCrunch writer) Josh Constine, who interviewed Deng in a wide-ranging fireside, asked the question. Some in the crowd of onlookers shouted “yes” in response, which Deng acknowledged. “I’m hearing from the audience that they do. I’m hearing from the audience they do.”

That Deng dodged the question isn’t surprising. OpenAI is in a delicate legal position where it concerns the ways in which it uses data to train generative AI systems like the art-creating tool DALL-E 3, which is incorporated into ChatGPT.

Systems like DALL-E 3 are trained on an enormous number of examples — artwork, illustrations, photos and so on — usually sourced from public sites and datasets around the web. OpenAI and other generative AI vendors argue that fair use, the legal doctrine that allows for the use of copyrighted works to make a secondary creation as long as it’s transformative, shields their practice of scraping public data and using it for training without compensating or even crediting artists.

OpenAI, in fact, recently argued that it would be impossible to create useful AI models absent copyrighted material. “Training AI models using publicly available internet materials is fair use, as supported by long-standing and widely accepted precedents,” writes the company in a January blog post. “We view this principle as fair to creators, necessary for innovators, and critical for U.S. competitiveness.”

Creators, unsurprisingly, disagree.

A class action lawsuit brought by artists including Grzegorz Rutkowski, known for his work on Dungeons & Dragons and Magic: The Gathering, against OpenAI and several of its rivals (Midjourney and DeviantArt) is making its way through the courts. The defendants argue that tools like DALL-E 3 and Midjourney replicate artists’ styles without the artists’ explicit permission, allowing users to generate new works resembling the artists’ originals for which the artists receive no payment.

OpenAI has licensing agreements in place with some content providers, like Shutterstock, and allows webmasters to block its web crawler from scraping their site for training data. In addition, like some of its rivals, OpenAI lets artists “opt out” of and remove their work from the datasets that the company uses to train its image-generating models. (Some artists have described the opt-out tool, which requires submitting an individual copy of each image to be removed along with a description, as onerous, however.)

Deng said that he believes artists should have more agency in the creation and use of generative AI tools like DALL-E, but isn’t sure, exactly, what form that might take.

“[A]rtists need to be a part of [the] ecosystem as much as possible,” Deng said. “I believe that if we can find a way to make the flywheel of creating art faster, we’ll really help the industry out a bit more … In a sense, every artist has been inspired by artists who’ve come before them, and I wonder how much of that will be accelerated by this.”

How Rubrik’s IPO paid off big for Greylock VC Asheem Chandna

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Asheem Chandna

Image Credits: Greylock

When Asheem Chandna drove up to Rubrik’s office in Palo Alto on a Friday night in early 2015, he was looking forward to learning what the young company that had yet to build its product would show him. The Greylock partner wasn’t disappointed.

The company’s CEO, Bipul Sinha, drew Rubrik’s plan to revamp the data management and recovery market on a whiteboard. “The old versus new architecture he presented was very compelling,” Chandna said. “Based on my knowledge of the sector, I knew it could be built into a large business.”

That was a prescient call. On Thursday, nine years after that meeting, Rubrik began its life as a publicly traded company with a market cap of over $6 billion. Greylock holds a 13% stake, according to the latest SEC filings. By the close of market Friday, with shares priced at $38, those nearly 19.9 million shares were worth over $756 million. 

But Chandna says it was much more than Rubrik’s desire to take on the arcane data recovery market that motivated him to lead Rubrik’s $40 million Series B in May 2015. (The Series B round sold for $2.45/share, adjusting for splits, according to those SEC documents. While Greylock also participated in later rounds at higher prices, Chandna’s returns on this one are hefty.) 

“The longer I do what I do, the more I fundamentally believe that venture is a people business,” said Chandna, who has been an investor for over 20 years and has an enviable track record of successful exits. He has helped incubate Palo Alto Networks in Greylock’s offices and was on the nearly $100 billion-worth company’s board until last year. Chandna was also an early investor in AppDynamics, Sumo Logic and Arista Networks.

Chandna looks for people who are not only motivated and ambitious, but are also self-aware of their weaknesses, and can recruit people who can get things done in areas that are not the founder’s strong suits.  

Another essential ingredient for a founder is grit. “If you had technology that was adequate, but slightly inferior to my technology, but you were very self-aware and persistent, you will beat me,” he said.

That’s what he saw in Sinha. Rubrik’s founder had a lifelong dream of starting a company. When he founded the data management and recovery startup in 2013, he couldn’t find strong engineers who wanted to come work there, Chandna recalled. The business he was trying to build was inherently not sexy at the time. 

Despite having been an investor with Lightspeed for four years before launching Rubrik, recruiting talent turned out to be a big challenge for Sinha. But he didn’t give up. He pinged engineers on LinkedIn and then invited them for coffee blocks away from where they worked.

“Startup journeys are very hard, even for the most successful companies,” Chandna said. “I want people who won’t take ‘no’ for an answer.”

Perhaps it was Sinha’s grit and ambition that compelled him to take his company public despite the lukewarm IPO environment.

“Rubrik has just under $800 million in annualized recurring revenue,” Chandna said, “That’s larger than most companies that went public in the last many years. I think they just wanted to get on with it.”

Chandna declined to say if he expects other Greylock portfolio companies to follow Rubrik’s lead but added emphatically that the firm’s best-performing late-stage businesses are Abnormal Security, Cato Networks, Discord, Figma and Lyra Health.

We will be following their fate closely.