In 2020, Dbt Labs’ data analytics tool was a side project at a small Philadelphia-based consulting shop with a sticky user base, but negligible revenue. Five years and one pivot later, that tool is at the core of a fast-growing business with over 5,000 paying customers and more than $100 million in annual recurring revenue, CEO Tristan Handy told Forbes.
Handy founded the company, previously known as Fishtown Analytics, almost a decade ago after his own frustrations as a data analyst dealing with clunky software. Cloud-based data tools like Amazon Redshift and Fivetran had become popular, but developers didn’t know how to get the most out of them, so he started a consultancy business to help.
But as Handy worked with clients, he decided to build a tool that could make the tedious task of cleaning and converting data from one format to another more like software engineering — with data engineers writing code and running tests instead of “duct taping things together.” It would make internal systems, which were often prone to break with any change, more reliable and efficient. That, in turn, could help businesses sort through troves of messy unorganized datasets faster and find patterns and data points to help make decisions. It was the consultancy’s “best secret weapon,” Handy said.
Then the company open sourced Dbt Core (short for “data built tool”) on the premise it could be free publicity for its consulting service. But it caught on and has continued to see steady adoption; Fishtown pivoted in 2020 and rebranded as Dbt Labs to become a software company.
Its data management tool for enterprises, Dbt Cloud, is now used by some 50,000 teams, with revenue skyrocketing about 80% in the past two years. Companies like Conde Nast, Nasdaq and Siemens use Dbt Labs’ products to simplify and format their data and glean new information from it.
“They’ve grown from a startup to a scaleup,” said Matt Miller, a partner at Sequoia who led the company’s $30 million Series B in 2020. The company has over the years raised more than $400 million in funding from other top-notch investors along with Sequoia, including Altimeter, Amplify Partners and Andreessen Horowitz, earning a $4.2 billion valuation in 2022.
As companies moved to the cloud and digitized their data amid the global pandemic, the company got an initial boost. Now yet another trend is spurring the company’s growth: artificial intelligence. Enterprise leaders are building new applications with generative AI and finding ways to harness AI internally to become more efficient. Core to those efforts is good, clean data, giving Dbt a new opening to provide tools that help make data easier for models to ingest. “AI is certainly a nice tailwind for us,” Handy said.
Miller said he first learned about the company through another data behemoth in his portfolio: $2.8 billion (2024 revenue) Snowflake. Part of Dbt’s scaling strategy is to act as a layer on top of different data warehouses like Databricks and Snowflake, where massive amounts of data is stored and processed, and “be the brain that operates across them,” Miller said. In January, the company acquired SDF Labs, which develops software that analyzes how data is moving from one platform to another.
Dbt Labs has recently added capabilities to its product that help people use natural language prompts to ask questions about their data and automate parts of a data engineer’s job like testing data quality and spinning up documentation. The nine-year-old company plans to continue focusing on its niche power users, adding more features for data practitioners, who’ve been vastly “underserved” in terms of tooling, CEO Handy said.
