The data transfer specialist Fivetran is growing rapidly and wants to hold its own against the industry’s heavyweights. „The sector has already undergone significant consolidation – where there used to be 15 tools for data storage and analysis, there are now perhaps five“, co-founder and COO Taylor Brown tells Börsen-Zeitung in an interview.

Operators of data warehouses – centralised storage systems for structured data from various sources – such as Snowflake and Databricks, are aiming to become the „hyperscalers of the data business“, says Brown. Tech giants like Microsoft and Amazon are also competing in the segment with products like Azure and Redshift. Around their core offerings, leading providers have launched a range of satellite products, which now compete with solutions from smaller players like Fivetran.

„In theory, it may seem simpler for corporate customers to get all their data management and processing tools from a single platform“, says Brown, who together with CEO George Fraser owns about 10% of Fivetran – the rest, according to PitchBook, is held by investment firms like D1 Capital Partners and Iconiq Capital. „But companies that launch that many products inevitably face varying levels of reliability and completeness. In contrast, we’re highly focused, and that positions us well for intensified competition.“ Many companies also prefer not to put all their data in one basket, opting instead for providers like Fivetran whose solutions complement data warehouses and databases like SAP and Oracle, allowing them to maintain flexibility.

Fivetran’s platform enables companies to automatically and securely extract data from various sources and feed it into a central database, from where it can be used in business intelligence applications – whether for descriptive analytics tools or more advanced AI-driven solutions.

Luxury goods group LVMH, for example, uses Fivetran to unify and transfer fragmented data from its 75 different brands, each using its own accounting and supply chain systems. The French company stresses that it has allowed them to save resources, redeploy IT staff to more productive tasks, and cut operating costs. LVMH has also gained a more comprehensive picture of customer behaviour across its brands – enabling more targeted marketing campaigns and optimised supply chains.

In early May, the California-based software provider, which reported annual recurring revenue exceeding 300 million dollars in 2024, announced the acquisition of data service provider Census. While financial details were not disclosed, the deal is meant to round out Fivetran’s portfolio: While Fivetran specializes in ETL processes (Extract, Transform, Load), Census is seen as a pioneer in Reverse ETL, enabling customers to push data from databases into business applications.

High-performance ETL computing is considered critical for scaling AI-based enterprise applications – drawing the attention of larger data industry players. Databricks CEO Ali Ghodsi, at his company’s Data & AI Summit in mid-June, introduced the Lakeflow Designer, a product designed to help analysts – even those with limited technical expertise – build company-specific ETL pipelines, assisted by AI tools.

Daniel Holz, Vice President for Germany and Central Europe at Databricks, recently told Börsen-Zeitung that his company does not aim to behave like a tech giant, steamrolling smaller developers with market power and in-house products. On the contrary, Databricks deliberately leaves room for startups to build complementary applications on its platform. This, he says, is necessary to scale the professional applications business beyond what would be possible organically.

Fivetran also hopes to capitalize on the AI boom to expand internationally. „In Germany, we certainly haven’t reached the growth rates we’re seeing in the U.S. or Asia-Pacific“, admits Alexander Zschaler, Regional Vice President for German-speaking markets. „But we’re seeing strong momentum.“ For German companies, productivity gains are at the top of the agenda. „Our automated platform gives firms and organizations back time and resources they can use more effectively“, says Zschaler. The larger the company, the greater the need for efficient data management solutions – though Fivetran also wants to target the Mittelstand (German SMEs).

Brown sees efforts in Brussels to strengthen data protection rules as improving Fivetran’s competitive position in the EU. „Our customers can now extract data that had been trapped in prohibitively closed SAP databases – and they’re making use of that,“ he says. However, trade tensions between the US and EU are worsening the business environment, with corporate spending on research and development likely to decline in the near term. „But fundamentally, I believe the prospect of value creation through AI outweighs the uncertainty caused by geopolitical risks“, emphasises Brown.

Given the rapid pace of technological development, Fivetran sees a continued need for heavy investment – to enhance its solutions and expand internationally. Over the long term, the company is considering an IPO to gain broader access to capital and boost brand awareness. But for now, Fivetran is waiting for a more stable market environment. „At the moment, it’s also important for us to make fast decisions, independently of market sentiment and tighter regulatory requirements that come with being a public company“, says Brown.