Cloudera Reconfigures for the Future

Data analytics pioneer Cloudera (NYSE: CLDR) hit the headlines three times this week, starting with its announcement of sale to a private equity team and merging into headlines about fresh acquisitions and upbeat earnings.

First things first: Cloudera will be taken private by investment firms KKR & Co. and Clayton Dubilier & Rice LLC. The deal is valued at about $5.3 billion, or $16 per share, and is expected to close by the end of this year.

An acquisition had been anticipated since at least 2019, when activist investor Carl Icahn wrangled an 18.4% stake and two board seats. At the time, Cloudera’s fortunes had waned. The company that started off with a bang in 2008 by commercializing open-source “big data” processing framework Hadoop had disappointed investors with its 2017 IPO, which seemed to bring a bit too little too late to the cloud analytics market.

Even a merger with Hadoop peer Hortonworks and a partnership with IBM (once seen as a potential buyer) didn’t stop the rollercoaster for the next couple of years. Things weren’t bad, they just weren’t great — and great was needed in the wake of the success of companies such as Snowflake (NYSE: SNOW) and Databricks.

The private equity deal is also no surprise, as it follows a trend that seems to be gaining momentum among tech firms, such as Proofpoint and Imperva.

Cloudera Buys Two Companies

As a private firm, Cloudera hopes to be a position to catch its breath and expand in areas not possible as a public firm. “As a private company, we can be even more agile and will continue to be focused on investing in innovation, building on our leadership position and staying ahead of the competition,” wrote company president Mick Hollison in a blog Tuesday.

Part of Cloudera’s efforts to best rivals in the hybrid and multi-cloud data analytics market -- particularly among highly regulated enterprises -- led to this week’s second big announcement: that Cloudera is buying two small companies, Datacoral and Cazena. Here’s a quick rundown of those firms:

— Datacoral, founded in 2016 in San Francisco by CEO Raghu Murthy (ex-Facebook), aims to simplify data pipeline issues related to getting big data integrated into a cloud-native, “no code” serverless development platform that runs on AWS. The company’s literature states: “Datacoral is designed to collect data from any source; automatically organize data transformations in Amazon Redshift, Athena, or Snowflake; and publish it into analytic, machine learning, and operational systems. We manage data pipelines that collect, organize, and harness your data so can derive data using only your SQL skills.” The company lists 31 employees on LinkedIn and raised $10 million in Series A funding in 2018 from Madrona.

—Cazena, founded in 2013 in Waltham, Mass., by Prat Moghe (ex-Netezza), boasts an “instant data lake” technology delivered in software-as-a-service (SaaS) format. Cloudera had previously partnered with Cazena on AWS and Azure, which also are Cazena partners. Cazena lists 42 employees on LinkedIn. It has raised more than $18 million in rounds led by Andreessen Horowitz and Northbridge Venture Partners, and lists Formation 8, Persistent, and Underscore as additional investors.

Cloudera Grabs for Brass Ring of Data Analytics

This week Cloudera also announced quarterly results, which indicate the company is in a solid position to move forward. Revenues of $224.3 million were up 7% year-over-year. GAAP net loss was $40.4 million, or 14 cents per share, compared to a net loss $58 million, or 20 cents per share year-over-year. Non-GAAP net income per share was 12 cents, compared to 5 cents last year. The current ratio is 1.2. Net cash from operations was $162 million, up 137% year-over-year.

All told, this week’s news shows Cloudera in a relatively good position to ramp its business. But there’s no time to lose: Competition is fierce in multi-cloud data analytics and automation, with rivals among all the major cloud providers as well as substantial startups like Databricks. Further, Cloudera is now beholden to new management. Hopefully, that will prove an accelerant to its goals.