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DBT Labs acquires SDF Labs to boost data transformation

By adding SQL comprehension capabilities, users will be able to validate code as it's written, speeding the transformation process and potentially improving data quality.

Eric Avidon
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Published: 15 Jan 2025

DBT Labs has acquired SDF Labs, adding SQL comprehension capabilities designed to improve the efficiency of developers and data engineers as they transform data.

Financial terms of the transaction were not disclosed. SDF Labs, a 2022 startup based in Seattle and founded by former Meta and Microsoft engineers, had raised $9 million in seed funding.

Data transformation is manipulating data to transform it from one format or structure to another to prepare it for informing analytics and AI tools.

One of the complications associated with data transformation is that another system doesn't always understand the SQL code written to transform raw data in one system. In addition, that code often can't be validated until data is moved into a testing environment.

SDF Labs provides multi-dialect SQL comprehension capabilities built with the Rust programming language so that SQL code can be validated as its written and ensure it's understood by any system. The outcome is faster transformation and higher data quality.

As a result, the acquisition is significant for DBT Labs, according to Kevin Petrie, an analyst at BARC U.S.

"If SDF delivers as promised, this acquisition marks a significant advancement," he said, noting that before the acquisition, DBT Labs' tools could not validate code until data was moved into a testing environment. "SDF … gives analytics engineers more confidence they are on the right track. It also speeds their development and testing process."

Based in Philadelphia, DBT Labs originated as an open source platform for transforming raw data into cleansed and validated data that can be used for analysis. Now for-profit -- while still providing an open-source option -- DBT Labs offers a Team version of its platform for $100 per developer seat, per month and an Enterprise version with customized pricing.

The acquisition

DBT Labs has grown rapidly since its inception in 2016, raising over $400 million in funding, including $222 million in February 2022.

As part of that growth, the vendor has expanded its capabilities beyond data transformation to include semantic modeling, data governance for data mesh architectures and integrations with a number of data management and analytics vendors that enable customers to easily develop data ecosystems.

Its core capability, however, remains data transformation. And while DBT Labs' platform has enabled users to transform data since its inception, the transformation process has remained complex and time-consuming. Acquiring SDF Labs aims to make data transformation easier and more efficient.

While SDF Labs -- including personnel such as CEO Lukas Schulte and co-founders Wolfram Schulte, Michael Y. Levin and Elias DeFaria. -- is now part of DBT Labs, there is no specific timeline for fully integrating SDF Labs' capabilities, according to Tristan Handy, co-founder and CEO of DBT Labs.

"I don't have a specific timeline at this point, although … getting this into the hands of users as soon as humanly possible is a huge priority," he said.

Regarding why DBT Labs chose to add SQL comprehension through acquisition rather than internal development, SDF Labs' founders and engineers have the expertise while DBT Labs' engineers did not, Handy continued.

"Some code can be built by anyone," he said. "But some code needs to be written by uniquely qualified humans. The core team at SDF … have created by far the most sophisticated technology of its kind."

Once available to DBT Labs customers, SDF Labs' SQL comprehension capabilities will address efficiency. In addition, by validating code as users write, completing code for users during development and surfacing errors in code earlier than previously possible with DBT Labs' tools, SDF Labs' capabilities have the potential to improve data quality.

Beyond improving developer efficiency and data quality, SDF Labs' SQL comprehension tools add a new layer of metadata to DBT Labs' lineage capabilities, improving DBT Labs' data governance features.

DBT Labs stood apart from competitors such as Qlik and Informatica by targeting technical engineers who prefer scripting over graphical user interface tools before acquiring SDF Labs, according to Petrie. The acquisition adds to that differentiation.

"DBT's specialized transformation capabilities make it a strong partner for ingestion-focused pipeline vendors such as Fivetran as well as the major data platform providers," Petrie said. "DBT's acquisition of SDF further differentiates it from the competition and boosts its appeal to partners."

While customers didn't specifically ask for SQL comprehension capabilities, they say they wanted DBT Labs' transformation tools to run faster and to catch errors earlier in their data pipelines, according to Handy. Those requests provided the impetus for acquiring SDF Labs.

"These -- and more -- are things that SDF brings to DBT," Handy said. "Our customers are absolutely demanding this technology from us."

The future 

Looking ahead, DBT Labs has an aggressive roadmap for the remainder of 2025, according to Handy.

DBT Labs unveiled a generative AI-powered assistant in May 2024. To make the platform easier to use, it plans to integrate DBT Copilot throughout the DBT Labs platform. In addition, new visual editing capabilities are being developed. But perhaps the most significant undertaking planned for 2025 is helping users adopt Apache Iceberg, now the most popular open table storage format and forms the foundation of many data lakehouses.

"[Iceberg] is likely the biggest change to happen in the data ecosystem since the advent of the cloud," Handy said.

Focusing on integrating DBT Copilot throughout the DBT Labs platform is wise, according to Petrie. With SDF Labs' capabilities able to automatically validate and autofill SQL code, they could also be used to validate generative AI outputs.

"I'll be interested to see how SDF affects DBT's copilot offering," Petrie said. "The copilot … might be a nice complement to SDF. DBT did not talk much about copilot in its [SDF acquisition] announcement, and I think they need to clarify the roadmap for that feature in light of SDF's new capabilities."

Eric Avidon is a senior news writer for Informa TechTarget and a journalist with more than 25 years of experience. He covers analytics and data management.

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