Clearlake Capital Group and Insight Partners joined forces to acquire Alteryx for $4.4 billion, including debt, with an eye to taking the NYSE-listed analytics cloud platform private.
The deal, which was approved and recommended by an independent special committee of Alteryx’s board of directors and subsequently approved by board, is expected to close in the first half of 2024. Under the terms of the agreement, Alteryx stockholders will receive $48.25 per share in cash for each share of Alteryx Class A or Class B common stock that they own — a 59% premium to Alteryx’s closing stock price on Sept. 5, 2023, the last full trading day before speculation about a possible sale made the media rounds.
“In addition to delivering significant and certain cash value to our stockholders, this transaction will provide increased working capital and industry expertise, and the flexibility as a private company,” said Alteryx CEO Mark Anderson.
Growth fed by venture capital
Alteryx started out in 1997 as SRC. A year later the company released a data engine that incorporated U.S. Census data; a few years later, a modified version of the software was provided to the U.S. Census Bureau under contract. 2006 brought the release of the Alteryx software, which provides a unified spatial and non-spatial data environment for the development of analytical processes and applications. In 2010, SRC changed its name to Alteryx, which had by then become its core product.
In 2011, Alteryx received venture funding for the first time to the tune of $6 million from SAP Ventures. In 2013, Alteryx raised $12 million from SAP Ventures and Toba Capital in a Series A round, followed in 2014 by a $60 million Series B round from Insight Partners, SAP Ventures successor Sapphire Ventures and Toba Capital. In 2015, ICONIQ Capital led a $85 million Series C round for Alteryx, with the participation of Insight Venture Partners and Meritech Capital Partners.
Alteryx used the VC backing to invest in research and development, growing its workforce and expand its sales and marketing efforts. On March 2017, Alteryx went public in a $260 million IPO.
In October 2021, Alteryx completed two acquisitions: Lore IO, an artificial intelligence-enabled data modeling platform that rapidly deploys adaptable analytics, and Hyper Anna, a cloud platform for generating AI-driven automated insights from data. In 2022, the company reported $855 million in revenue, a net loss of $318 million and $1.56 billion in total assets.
“When we founded Alteryx in 1997, we did so with a vision for the future of data science and analytics,” said Dean Stoecker, Alteryx co-founder and executive chairman of the board. “Today, Alteryx stands out as an industry leader with a differentiated platform that scales data democratization in a governed manner.”
The way forward
“As organizations become increasingly data driven and focused on utilizing artificial intelligence technology, we see a tremendous growth opportunity for Alteryx’s new AI products and feature-rich cloud solutions and to further its reputation as an innovator in the data preparation and data analytics markets,” said Clearlake Co-founder and Managing Partner Behdad Eghbali and Partner and Prashant Mehrotra in a joint statement.
“We have long appreciated the Company’s best-in-class technology that enables users to transform data into insights, and we are thrilled to support Alteryx as it continues to push the industry forward with generative AI and machine learning (ML) SaaS technologies, as well as its growing portfolio of cloud-connected offerings,” they added.
Santa Monica, Calif-based Clearlake deploys a proprietary framework for active value enhancement dubbed O.P.S. — short for Operations, People and Strategy — that helps small- and medium-sized companies devise creative solutions to operational challenges. The firm’s portfolio currently includes 49 companies across the technology and software sectors.
Insight Partners first met Alteryx co-founder Stoecker in 2006. “After witnessing Alteryx’s evolution into a data prep and analytics leader, our partnership began in 2014, coinciding with Alteryx’s expansion into new verticals and the development of a top-tier product,” said Insight Managing Directors Deven Parekh and Ryan Hinkle in a joint statement. ” We’re looking forward to opening this new chapter with Alteryx as they advance into the next phase of their growth journey, focusing on cloud and AI/ML to create winning products.”
New York-based Insight has invested heavily in AI/ML and data, with a total of 79 portfolio companies across the sectors.
“Over the past several years, we’ve executed a comprehensive transformation strategy to enhance our go-to-market capabilities and establish a strong cloud and AI innovation roadmap,” said Alteryx CEO Anderson. “We are excited to partner with Clearlake and Insight for the next stage of Alteryx’s journey.”