February 23, 2024

AI-driven analytics platform ThoughtSpot, last valued at $4.5 billion, announced today that it has reached a definitive agreement to acquire business intelligence startup Mode Analytics for $200 million in cash and stock.

Once the transaction closes later this year, Mode will become a wholly owned subsidiary of ThoughtSpot, subject to customary closing conditions and the approval of Mode shareholders.

This is ThoughtSpot’s fourth acquisition, following the (most recent) acquisitions of SQL-based analytics firm SeekWell in March 2021 and data integration firm Diyotta in May of the same year. Enabling all of the deals is ThoughtSpot’s massive funding, totaling more than $663 million as of August 2019.

As for the Mode acquisition, ThoughtSpot CEO Sudheesh Nair said it will enhance ThoughtSpot’s generative AI applications while doubling the company’s customer base and increasing its annual recurring revenue to more than $150 million.

“With this acquisition, we’re giving data teams and business users the tools they need to efficiently and quickly turn data into insights, and those insights into action.”

San Francisco-based Mode was co-founded in 2013 by Derek Steer, Benn Stancil, and Josh Ferguson, and was last reported by TechCrunch in August 2020. All three had previously worked at Yammer (they were early employees who stayed on after the Microsoft acquisition), and they were part of a larger team building custom data analysis tools for the Yammer platform.

Steele told my colleague Ingrid Lunden that the impetus for Mode came from a gap in the market the trio had identified through years of experience at other companies. Specifically, they saw an opportunity to build a product that could provide business intelligence and big data analytics capabilities to help data scientists improve decision-making for employers.

Mode has indeed managed to find a foothold in the large and growing business intelligence market (valued at an estimated $27.11 billion in 2022, according to Prior to the ThoughtSpot acquisition, the company had raised $81 million in venture capital from investors including HIG Growth Partners, Valor Equity Partners and Rev.

Mode once claimed that its customer base covered more than 50% of the Forbes 500 companies, including brands such as Anheuser-Busch, Zillow, Lyft, Bloomberg, Capital One, VMware, and Conde Nast.

“At Mode, we’ve always focused on helping data analysts and trying to remove the frustrations that interfere with their daily workflow,” Stancil, Mode’s chief technology officer, said in a statement via email. “By providing an integrated, code-first experience for data teams, we’re enabling customers to move faster and discover more value in their data than before.”

For Mountain View, Calif.-based ThoughtSpot, the deal makes perfect logical sense. ThoughtSpot was founded in 2012 by a team of engineers who had worked at Google, Oracle and other Silicon Valley companies.

ThoughtSpot’s platform is designed to allow “non-technical” users to analyze data, using tools to monitor patterns and trends in information from sources such as Snowflake and Databricks. ThoughtSpot’s products, favored by the likes of Walmart and Apple, are primarily focused on self-service analytics, with some artificial intelligence and machine learning thrown in.

What Mode brings, then, is a set of complementary products. Nair sees the acquisition creating “new ways” for ThoughtSpot customers to deliver value to data teams, such as enabling them to create analytical applications and model or visualize data in Mode, then serve it up through ThoughtSpot’s dashboards.

“For too long, data teams have been hampered by outdated previous-generation data visualization tools like Tableau, forcing them to endlessly tweak and update dashboards,” Nair said in a release. “Whether you want business users to go no-code or analytics engineers to go code-first, if you want to get the most value from your investment in a modern data stack, now is the time to rethink business intelligence.”

The ThoughtSpot acquisition, along with other big exits in big data analytics, could be a sign of consolidation in the industry ahead of tough macroeconomic conditions looming. Also today, Databricks acquired MosaicML, a startup developing open-source artificial intelligence tools, for $1.3 billion. A month ago, Snowflake acquired Neeva, a company that aims to leverage AI innovations to build a new approach to search across consumer and enterprise. (The consumer part never took off, and Neeva sold out.)