Analytics engineering company dbt Labs — which went from tiny Philly-bred startup to unicorn status in about four years — announced Wednesday it had signed a definitive agreement to acquire San Francisco-based Transform.
Last year, dbt Labs raised a $222 million Series D, valuing the company at $4.2 billion at the time. It also launched its first in-person Coalesce conference after virtual events in 2020 and 2021.
At the conference, dbt Labs unveiled its semantic layer, a “combination of open-source and SaaS offerings” that helps “improve precision and consistency” of data analytics, while increasing flexibility, per the company. This allows organizations a way to “centrally define business metrics in dbt and then query them from any analytics tool.” The product includes a few components of dbt Core, dbt Cloud and some new functionalities.
In a blog post published Wednesday, CEO Tristan Handy called the team at Transform the “original innovators behind the semantic layer in the modern data stack.” Its core technology, MetricFlow, best defines metrics and compiles definitions into performant SQL, Handy said.
“This technology — the creation of the ‘query plan’ and then generating high-quality SQL from it — is the hard part of what we refer to as the semantic layer, and it’s something that Transform has absolutely nailed,” he wrote.
It’s the motivating factor for the company’s deal, Handy said, as dbt Labs will be adding MetricFlow to the dbt semantic layer in the coming months. Since its launch in October 2022, semantic layer has seen 14 integration partners, according to dbt Labs.
In the blog post, Handy reiterates the foundation of dbt as an open-source platform.
“From the very earliest days of dbt, it was clear to me that the core of dbt needed to be open source. Why would anyone invest so much time encoding their knowledge into a framework that could fundamentally be ripped away from them at any point?” he wrote. “dbt’s licensing strategy has always existed to create the largest-possible groundswell of usage, to enable an entire industry to change the way it worked, and to give its users control.”
As part of the acquisition deal, Transform’s entire founding team, plus most of their team of 30 will join the 399-person dbt team. dbt did lay off seven people — 2% of its team — in January to address parts of the business where staffing didn’t align with its current needs, company spokesperson Kate Ward told Technical.ly.
The combined teams will continue to work on accelerating the semantic layer, along with Transform cofounder and CEO Nick Handel, cofounder and COO James Mayfield and cofounder and Software Engineer Paul Yang. Financial details of the deal were not disclosed.
“We are immensely proud of what the team at Transform built and that MetricFlow will be such a significant piece of the future of the dbt Semantic Layer,” Handel said in a statement. “We have an exciting shared vision for how dbt and MetricFlow can fit seamlessly together. Our experience in this space and dbt Lab’s unmatched industry standing could not make more sense together. All of that and our two incredible cultures make this a natural fit. “
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