This morning Microsoft, the most valuable company in the world and one of domestic tech’s Big 5 cohort, announced that it has purchased BlueTalon, a startup focused data access, control, and security, for an undisclosed amount.
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Data-focused startups, and security-focused upstarts, have proved hot commodities in recent years as both companies in the space have gone public, been acquired by larger players, or raised large checks (here are some examples).
BlueTalon is the fourth known company that Microsoft has acquired in 2019, following Citus Data in January, DataSense in February, and Express Logic in April. BlueTalon is therefore Microsoft’s first buy in Q3 and H2 of this fine year, as you can see in the chart below.
BlueTalon raised external capital over three rounds, effectively. It raised a $1.5 million seed round in early 2014, a two-part venture round in 2015 worth a combined $9.9 million, and a 2015 Series A worth $16 million. Of course, not raising since August of 2015 means that BlueTalon did not raise known capital in a roughly three-year time period.
That’s a while in startup terms; while some startups are more cash efficient than others, allowing them to stretch one major round for longer than the traditional 18-month window, three years is, as the youth say, a minute. Which means that the company may have gone out looking for more money and instead found a new home.
And if that wasn’t hint enough, here’s what the company had to say:
The IP and talent acquired through BlueTalon brings a unique expertise at the apex of big data, security and governance. This acquisition will enhance our ability to empower enterprises across industries to digitally transform while ensuring right use of data with centralized data governance at scale through Azure.
Together with BlueTalon, we are committed to help enterprises become data-driven companies in a secure and compliant manner.
At the nexus of big data, security, and governance, what do you find? Not only a coven of hungry Gartner analysts; you also find a lot of problems. Industries have varying needs regarding data and permissions thereof. (Recall that we noted earlier that BlueTalon works with data permission.)
Adding BlueTalon’s intellectual property (Microsoft listed IP ahead of talent, note) to Azure could help the Microsoft AWS competitor better compete against its cross-town rival for big-ticket deals.
We keep tabs on startup deals like this one as they represent a good share of the exit market for emerging tech companies. Not every company makes it to an IPO.