A hot market for startup funding and booming demand for smarter data analysis software are combining to fuel the rise of DataRobot. The Boston-based company on Tuesday raised $300 million of additional investment as it moves closer to going public.
The private deal valued DataRobot, founded in 2012, at $6.3 billion, more than double the value it reached in a fund-raising round late last year.
DataRobot’s software uses artificial intelligence to help companies sift through vast amounts of data and build useful models that can, for example, make predictions about customer behavior or forecast demand for products.
A retail chain might use DataRobot to help decide which items to stock for back-to-school season, or a bank might use the software to forecast how many loans will go bad if the economy weakens. Typically, building models to make such predictions requires trained data scientists and software engineers, but DataRobot’s software aims to make the task easier for less-specialized workers.
That makes the company “extremely well positioned” to benefit “as every company looks to unlock the full potential of their data to drive AI-powered business insights,” Brad Gerstner, CEO of venture capital firm Altimeter Capital, said in a statement. Altimeter was an early investor in the company and invested more in Tuesday’s deal.
DataRobot has gone through some strife recently, however, laying off staff during the pandemic and changing chief executives in March. Co-founder Jeremy Achin was ousted and chief operating officer Dan Wright, who had joined about a year earlier, took over the top job. Wright has since brought in executives from his former employer, Cisco Systems, to oversee human resources and marketing. He also added a new chief financial officer from Salesforce.com.
Still, sales have continued to grow and DataRobot remains a top candidate to go public later this year.
DataRobot also announced an acquisition on Tuesday, snagging Seattle software developer Algorithmia. The small startup makes machine learning software that analyzes data in real time. DataRobot didn’t reveal the purchase price.
Investors in DataRobot’s latest fund-raising included venture capital firms such as Altimeter Capital, Tiger Global, and Sutter Hill Ventures plus the investment arm of software company ServiceNow and mutual fund firm Franklin Templeton.