The success story started at the Technical University of Berlin. Kostas Tzoumas, now CEO of Data Artisans, was a researcher there after earning his doctorate in computer science. At university he met his co-founders Stephan Ewen, Ufuk Celebi, Fabian Hueske, Aljoscha Krettek and Robert Metzger. Together with a TU professor, they developed a technology that can be used to evaluate data in real time: Apache Flink.
The technology enables so-called stream processing. This means that data can not be analyzed until it is saved, but as it is created. One use case: If someone posts something in a social network, the content of the post is immediately evaluated, so that the author can get pertinent advertising for the post.
Uber and Zalando were among the first customers
In order to turn their technology into a business, Tzoumas and his team founded Data Artisans in 2014. Since then, they have provided the code for their technology on an open source platform so users can modify it for their own projects. In 2016, they also published a paid Enterprise version.
The data analysis technology of the Berliner arrived from the beginning worldwide. Well-known companies such as Uber and Zalando were among the first paying customers. Also an early user: Alibaba. “Impressive” says Florian Schweitzer, who has been involved with Data Artisans since 2014 through venture capitalist Btov. After all, the founders were just “students who did not know how to start a business”.
The decisive factor for the startup’s success was the fact that the Data Artisans team had learned the entrepreneurial know-how extremely quickly. In addition, the founders would have initially focused fully on their open source platform instead of monetization, says Schweitzer. “They’ve made the product better with the users, rather than letting them pay for something that’s not ripe yet.” Other startups may find some way out of this approach, the investor finds.
Too early for the exit?
That his stake was now sold, he consider zwiegespalten. Basically, the exit is a “really good news for the ecosystem Berlin and the whole of Europe”. In addition to Relayr, Data Artisans was “one of the first real technology companies in Berlin” to be sold. “On the other hand, I think that as an independent company you could have achieved a lot in the next few years”, said the investor.
At the very least, a decent sum for Btov should have sprung out of the deal. The VC held before the exit 22.55 percent stake in Data Artisans. Although Schweitzer did not want to comment on the actual purchase price, however, the sum of 90 million euros mentioned so far in the media is in the right order of magnitude according to current founder scene information. Btov has invested in low-single-digit millions in Data Artisans in two rounds of financing, said Schweitzer. He did not comment on how high the funding was overall. According to Crunchbase, there are a total of 6.5 million euros.
The founders also got off well at the exit
CEO Kostas Tzoumas and CTO Stephan Ewen each owned twelve percent, while the rest of the founding team owned nine percent. The investors Intel and Tengelmann Ventures held 16 and nine percent, respectively. Another shareholder was the “1688 Singapore E-Commerce Private Limited”. It is a subsidiary of Alibaba – the company was thus involved with about 13 percent of Data Artisans before the purchase.
Alibaba first shopped in Germany
The purchase of Data Artisans is Alibaba’s first acquisition in Germany. So far, the company has bought 22 companies according to Crunchbase, most of them from China. From Europe so far Trendyol, a Turkish fashion online shop, and the Israeli marketing startup Visualead there. Alibaba put much higher sums on the table than now for Data Artisans: For the Chinese video platform Youku the company paid about 5.5 billion dollars.
Alibaba writes on its website that they invest “always for strategic reasons, never for financial reasons”. It is unclear why the company decided to acquire Data Artisans and what the future cooperation will look like. Alibaba has not responded to start-up demand so far, and even the Data Artisans founders were unwilling to talk to one another.
In blog posts, both companies simply write that they wanted to develop Data Artisans’ open source platform together. Alibaba will also provide its users with the platform’s own modification of the code.
Also published on Medium.