Data analytics software company Snowflake announced on Monday that it has reached an agreement to acquire Crunchy Data, a cloud-based database startup. While financial terms weren’t officially disclosed, a source familiar with the deal—who requested anonymity—revealed the purchase price to be around $250 million.
Crunchy Data offers a cloud-hosted version of the open-source PostgreSQL database, which overtook MySQL as the most popular database in Stack Overflow’s 2023 developer survey. The company’s solution includes enhancements in security and performance compared to the standard open-source version.
This move comes shortly after Snowflake competitor Databricks announced its intention to acquire Neon, another PostgreSQL-based software provider, for approximately $1 billion. Snowflake had previously explored acquiring Neon last year but opted not to proceed, according to another source. Crunchy Data currently generates more than $30 million in annual recurring revenue.
Neon has not commented on the matter.
Both Snowflake and Databricks aim to leverage these acquisitions to tap into increased enterprise investment in AI agents capable of performing tasks autonomously.
Following the acquisition, Snowflake will roll out early access to a PostgreSQL database service. According to Christian Kleinerman, Snowflake’s EVP of Product, the new offering will streamline the process of migrating data into the Snowflake ecosystem, enabling clients to run queries on a broader and more integrated dataset.
Snowflake’s shares have climbed approximately 36% year-to-date. In May, analysts at Stifel compared the company to elite golfer Scottie Scheffler, stating that Snowflake had posted a “Scheffler Like Quarter & Guide,” exceeding expectations with a 25% increase in revenue compared to the previous year. Stifel maintains a buy rating on the stock.
“We’re helping our customers build a strong foundation to lead in the era of agentic AI,” Snowflake CEO Sridhar Ramaswamy told analysts on a conference call in May. “We’re continuing on this momentum, and you’ll see even more from us in just a few weeks.”
Founded in 2012, Crunchy Data is headquartered in Charleston, South Carolina, and employs around 100 people. Its investors include Alsop Louie Partners, Gray Ventures, Harbert Growth Partners, and Heavybit. The company’s client roster features prominent names such as Kyndryl, Thales, UPS, and the U.S. Department of Homeland Security.
Snowflake’s acquisition of Crunchy Data marks a strategic move to strengthen its position in the cloud database and AI-driven analytics space. By integrating Crunchy Data’s enhanced PostgreSQL technology and tapping into its strong client base, Snowflake aims to simplify data migration and expand its capabilities. As competition with Databricks intensifies, this deal reinforces Snowflake’s commitment to innovation and long-term growth in the enterprise data market.
