AFR: Instaclustr buys Credativ in its first acquisition
By Yolanda Redrup
Bailador-backed open source data technology company Instaclustr has made its first acquisition, buying Germany company Credativ, in a deal that’s expected to boost its revenue by 25 per cent.
Instaclustr, which was co-founded in 2013 by Benjamin Bromhead, Adam Zegelin, Doug Stuart and Peter Lilley, gives businesses a platform that helps them host and manage applications that require mass amounts of data and run using multiple open source tools such as Facebook’s Cassandra, Kafka and Elasticsearch.
Instaclustr CEO Peter Lilley says Credativ is the company’s first acquisition.
A bolt-on acquisition, Credativ is a consulting company that provides more than 500 business customers with expertise and support for open source technologies such as relational database PostgreSQL, computer application automation platform Kubernetes and operating system Debian.
Speaking to The Australian Financial Review, Instaclustr CEO Peter Lilley said the company had been working on the deal since late October last year.
“I’ve been on the sell side with my previous company [Stratsec, which was acquired by BAE Systems Australia], but this is the first time experiencing acquiring a new business into Instaclustr,” he said.
“[Credativ] is a group of very deep open source experts in a number of technologies strategic to Instaclustr’s business and they have a set of very important customers as well.
“From a technical perspective, it’s not a business built on anything like what Instaclustr has, so there isn’t a lot of technical integration risk, for us [the integration] will be about people and culture and that’s important.”
The deal comes after the business brought on board former chief financial officer of SAI Global Geoff Richardson as CFO late last year.
It follows speculation the business is preparing for an initial public offering, with Street Talk revealing Morgan Stanley was conducting a non-deal roadshow for Instaclustr earlier this month, ahead of a listing in which the company would look to raise about $150 million.
This would imply a valuation of hundreds of millions of dollars for the business, which now has 7 petabytes of data under management across its technology suite.
However, Mr Lilley said the company was also still considering raising another round of private funding.
Instaclustr, which managed to continue to grow its revenue at a rate of about 35 per cent in 2020 despite some of its 150 customers being affected by COVID-19, has recently exceeded $20 million in annual recurring revenue.
In September one of its backers, listed investment firm Bailador, increased its valuation on Instaclustr by 42 per cent, valuing its stake at $27.1 million.
Mr Lilley said the business was able to show its resilience in 2020, but long-term he believed the company could maintain a 50 per cent to 70 per cent annual organic revenue growth rate.
“Bringing Credativ into the business is additive to our story,” he said.
“We’re very fortunate... [to be] able to work with customers, where some of them have enjoyed exceptional growth in COVID ... which has offset those in more impacted sectors like travel and led to a strong overall net positive.”
To help accelerate the economy out of COVID-19 and leverage the country’s advantageous position, Mr Lilley said the government and business leaders needed to “double down” on thought leadership around innovation, security, technology and the cloud.
Mr Lilley said the entire Credativ team would join Instaclustr, including its founder and CEO Dr Michael Meskes, who started the company in 1999.
“Instaclustr is a highly respected global provider of managed data-layer solutions and consulting services that shares our fundamental belief in the power of pure open source technologies,” Dr Meskes said.
“They have earned their reputation as leaders in championing the benefits of 100 per cent open source as a superior alternative to open core strategies that promote vendor lock-in, raise costs and make data portability a challenge.
“We look forward to joining Instaclustr on this journey and to get started driving modernisation for Instaclustr customers.”