Talend

Prospectus Summary

Company Overview

Our mission is to enable every organization to harness the power of their data. Our software platform, Talend Data Fabric, integrates data and applications in real time across modern big data and cloud environments, as well as traditional systems, allowing organizations to develop a unified view of their business and customers across organizational and technology silos. Effective and strategic use of data to optimize every aspect of business is a competitive advantage. Talend is a key enabler of the data-driven enterprise where data is becoming a strategic asset. Talend Data Fabric allows customers in any industry to improve business performance by using their data to create new insights and to automate business processes. Our customers rely on our software to better understand their customers, improve customer service, detect fraud, and predict equipment maintenance needs.

The amount of data available for decision making is increasing exponentially, and the technology to analyze and act on that data is becoming dramatically more capable and cost-effective, and ubiquitous. As a result, IT infrastructure is undergoing an industrywide, transformative shift toward new big data and cloud platforms. At the same time, the increasing pace of business is driving the need for more real-time data processing and the need to make data-driven decisions throughout every organization is creating demand for self-service business and analytical applications. The growth in data sources such as mobile and social, and the rise of new big data and cloud platforms to analyze this data, combine to create major growth engines for the data integration market. We believe our products immediately address the markets for Data Integration and Access Software, Master Data Management, and Integration and Orchestration Middleware, which International Data Corporation, or IDC, estimates combined were $16 billion in 2015 and are forecasted to reach $21 billion in 2019. Within those large markets, demand for big data integration and cloud integration is growing particularly quickly due to growth in their underlying markets. The markets for big data technology and services and public IT cloud services are expected to grow at compound annual growth rates, or CAGRs, of 23% and 19%, respectively, from 2015 to 2019 according to IDC estimates.

Talend Data Fabric provides a comprehensive, flexible platform to address IT integration needs across industries. Our platform works seamlessly at the speed and scale of modern big data architectures and across on-premise and cloud environments to connect both traditional and big data environments. Organizations can quickly integrate all forms of data across systems and applications at scale, with significantly improved performance and lower total cost of ownership than traditional data integration approaches. Our platform interoperates with modern big data technologies, such as Hadoop, Spark, and Spark Streaming, and our flexible product architecture enables us to rapidly adopt new technologies as they emerge. Our technology allows our customers to manage both batch and real-time data processing and incorporate machine learning to leverage data for the automation of operational workflows. Our flexible cloud architecture allows organizations to operate in a cloud-based environment such as Amazon Web Services, Google Compute Engine, or Microsoft Azure, in their on-premise datacenter, in private clouds, or in any hybrid combination. Our Talend Big Data Integration solution can run up to seven times faster on big data platforms than a certain large competitor's product, according to a McKnight Consulting Group, or MCG, study we commissioned.

We offer Talend Data Fabric as a subscription license based primarily on the number of users of our platform. Individual developers often discover Talend through our open source offerings and introduce our solutions more broadly within their organizations. Many of these organizations choose to license our commercial products for enterprise deployment. After an initial deployment, organizations often purchase additional subscriptions or expand their usage to additional modules within Talend Data Fabric. The unified code base and modularity of our products allows organizations to enable additional functionality with just a license key, significantly reducing software deployment and training costs.

We have a broad, global customer base that includes Allianz, Citi, General Electric, Lenovo and Siemens and spans a broad range of industries, including financial services, technology, telecommunications, healthcare, manufacturing, and retail. We have developed an ecosystem of over 120 partners including Cloudera, Hortonworks, MapR, and Amazon Web Services, as well as many leading systems integrators such as Accenture and Capgemini. This ecosystem extends the capabilities of our platform, enhances our sales reach and market penetration, and maximizes the value of our solutions for our customers.

For the year ended December 31, 2015, our total revenue was $76.0 million, including $62.7 million of subscription revenue that grew 39% year-over-year on a constant currency basis (27% year-over-year on an actual currency basis). We experienced net losses of $22.0 million and negative free cash flow of $10.8 million for the year ended December 31, 2015 as we continued to invest in growing our business. For the quarter ended March 31, 2016, our total revenue was $22.8 million, including $19.3 million of subscription revenue that grew 42% year-over-year on a constant currency basis (40% year-over-year on an actual currency basis). We experienced a net loss of $5.3 million and positive free cash flow of $1.7 million for the quarter ended March 31, 2016.

Industry Overview

We are in the early stages of four disruptive trends that are reshaping the IT industry and creating an increasing number of new opportunities for organizations to be data driven.

The Data-Driven Imperative: The rise of social media, proliferation of mobile and Internet of Things, or IoT, devices, and growing adoption of cloud-based IT infrastructure is producing massive quantities of new data for organizations. IDC estimates that the quantity of data will double every two years through 2020 to reach 44 trillion gigabytes. The proliferation of digital information provides new opportunities for organizations to leverage data to enhance their business, making its effective and strategic use a key competitive advantage. According to Accenture, 84% of executives expect big data to shift their competitive landscape within a year. For example, organizations can tailor product offerings to a customer in real time based on online shopping behavior while the customer is still online, increasing the likelihood of a transaction. In a business environment where data is available and actionable, data-driven decision making is now a competitive necessity.

Generational Shift to Big Data Technology: To accommodate the enormous increase in data, IT infrastructure is in the midst of a transformative shift towards next generation big data technology. Technologies such as Hadoop, Spark, and NoSQL enable organizations to manage and process far greater amounts of data in real time and at significantly lower costs. Forrester estimates that 100% of large enterprises will adopt Hadoop and/or related big data technologies such as Spark by 2018. As organizations become familiar with these new technologies and better understand their capabilities, they increasingly choose big data technologies for new projects they initiate.

Cloud Adoption Becomes Mainstream: IT infrastructure is undergoing a shift as organizations extend their infrastructure with cloud-based solutions. The traditional information technology framework of standalone hardware running on-premise software, which is deployed and maintained by IT departments, is shifting rapidly toward a virtualized, cloud-based infrastructure that reduces upfront investment, ongoing maintenance and support costs, and increases agility. This evolution of IT infrastructure also requires organizations to support hybrid environments, as some of their systems and data remain on-premise while others move to the cloud. As a result, organizations seek solutions that enable simultaneous integration across both traditional and cloud architectures.

Demand for Self-Service Technology: The proliferation of data, coupled with its strategic importance, has significantly increased business users' demand for tools to access the data themselves. In many cases IT controls the data but does not deliver it in a format easily analyzed or used by the business. This has led to demand for a new wave of self-service tools that allow both IT and business users to access, merge, cleanse, and analyze data more quickly than before. By removing the IT bottleneck in accessing data, organizations empower key business stakeholders to leverage all of their data quickly to create new insights and implement operational changes.

Limitations of Traditional Approaches

Historically, data integration has been performed through two different approaches: hand-coded integrations manually created by developers or legacy Extract, Transform, and Load, or ETL, software. Hand coding requires developers to write unique code manually for each specific data integration workflow. Legacy ETL software extracts data from various databases, blends it together, transforms it into a unified data model, and subsequently loads it into a data warehouse. Both traditional approaches have significant limitations, including:

Limitations of Hand Coding:

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Scarcity of technical talent. Many organizations are unable to find and retain developers with the expertise required for hand coding, especially in rapidly evolving big data and cloud technologies.


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Requires significant time from developers. Hand coding is a costly, resource-intensive, and inflexible approach.


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Lacks governance and control. Governance of data using hand coding methods relies on time-consuming manual developer documentation, which can be error prone, incomplete, out of date, or nonexistent.


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Not adaptable to new technologies. Hand coding requires manual integration between systems using technology-specific code, impeding flexibility to migrate to new technologies or integrate multiple systems, especially if documentation is incomplete or there has been developer turnover.

Limitations of Legacy ETL Software:

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Not designed for big data architectures. Legacy ETL software was built primarily to integrate structured data from on-premise applications and relational databases into data warehouses, and is not designed for big data platforms such as Hadoop and Spark.


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Poorly integrated cloud solutions. Legacy ETL software is not designed to work effectively with modern data infrastructures that are cloud-based or that have a mix of both on-premise and cloud systems.

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Lack real-time insight. ETL software typically uses a bulk or batch processing approach that processes data on a daily, weekly, or monthly basis for use in post-transaction analytics and reporting. It lacks predictive and real-time capabilities.


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Complex and difficult to deploy. Legacy ETL software has been built and modified over decades, making it difficult to use and cumbersome to deploy.

Our Solution

Talend Data Fabric is a modern, unified platform designed to meet integration needs of both developers and business users. It works seamlessly across on-premise, cloud, and hybrid environments, and integrates data in real time from both traditional and big data platforms. The benefits of our solution include:

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Designed for big data technologies. Our solution was purpose-built to work with modern big data architectures, allowing organizations to integrate their data seamlessly in any environment. Our product architecture generates code that runs natively in Hadoop and Spark to take full advantage of the scale and speed of big data technologies.


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Integrated cloud solution. We provide a single integration solution that can be deployed on-premise, in the cloud, or in a hybrid environment. Because our solution is designed for seamless integration between cloud and on-premise environments, organizations have access to identical architecture and functionality across all potential use cases.


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Powerful real-time integration and machine learning. We enable organizations to unlock the value of their data to create real-time, predictive insights. With Talend, customers can create intelligent data flows with machine learning algorithms that can process both batch and real-time streaming data.


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Self-service functionality. Our solution enables anyone in IT or a business role to access, cleanse, enrich, and integrate data with an easy-to-use, web-based user interface. This empowers business users to conduct more data preparation on their own, without waiting for IT resources.


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Rapid deployment and agility. We have simplified the complexities of connecting big data and traditional architectures across cloud and on-premise environments which accelerates development and reduces cost. Our solution can be deployed and in production in a matter of hours, due to its lightweight architecture and intuitive functionality.


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Robust governance and management capabilities. Our solution provides organizations with powerful governance and management capabilities for their data assets. We provide visibility into data flows, lineage and stewardship that continuously updates as developers change integrations.

Competitive Strengths

We believe we have a number of competitive advantages that will enable us to maintain and extend our leadership position in next-generation data integration. Our competitive strengths include:

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Differentiated performance and scalability. Talend Big Data Integration builds data integration flows that run natively within Hadoop platforms and leverage the latest technologies to run up to seven times faster than a certain large competitor's product, according to an MCG study we commissioned.

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Flexible pricing model providing a compelling value proposition. We offer our commercial products primarily based on a flexible, per-user annual subscription pricing model that allows for wide adoption within an organization at significantly lower upfront and total cost of ownership compared to the cost of legacy data integration tools that are priced per-CPU core or per-node and require proprietary run times.


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Open source model providing go-to-market leverage. Our free open source solution generates qualified leads for the licensing of our enterprise-grade subscription solution. Our open source products have been downloaded more than two million times.


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Adaptable and extensible architecture. We continuously update our solution to work with existing and new technologies and data frameworks. Talend's architecture separates the design of integration jobs from the actual code, which enables our platform to work with new technologies as they emerge, such as Hadoop and Spark. We believe that technologies and frameworks will continue to evolve and our ability to adapt to these changes is a key competitive advantage.


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Powerful network effects from our Talend Data Fabric Platform. With over one thousand pre-built connectors and components, the breadth of our platform continues to attract new developers to our community, who in turn develop new connectors and components that they contribute back to our open source community. Our pre-built connectors enable our customers to easily integrate data from various data sources and applications without expert knowledge about each data system and without hand coding a connector to access data. Easy integration with a broad range of systems is a critical decision factor for potential customers as it allows our solution to address a wide variety of data use cases. This creates a powerful network effect whereby we and our community keep each other at the forefront of innovation.

Our Growth Strategy

Key drivers of our growth strategy include:

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Maintain our technology leadership. We intend to continue to invest in our Talend Data Fabric platform, and innovate and develop new features, functionality, and product modules.


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Grow our customer base. We plan to grow our customer base by continuing to expand our sales organization, develop our channel relationships, and convert open source users into paying customers.


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Further expand within our existing customer base. We have had success in upselling customers from a single project and smaller deployments to expanded deployments over time. We plan to further enhance our land-and-expand sales approach.


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Expand our ecosystem of partners. We will continue to invest in and grow our strong ecosystem of partners spanning big data vendors, cloud application providers, analytical software providers, commercial use/or original equipment manufacturer, or OEM, partners, systems integrators, and value added resellers.


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Continue to grow internationally. Although the United States is one of Talend's fastest-growing markets, we expect to experience balanced growth across the United States and the rest of the world as we expand our global presence.


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Cultivate our open source community. We will continue to release open source versions of our product to increase our exposure among developers and enhance our community to develop additional components and connectors for our integration platform, some of which we will commercialize.

Risk Factors Summary

Our business is subject to numerous risks and uncertainties, including those highlighted in "Risk Factors" immediately following this prospectus summary. These risks include, but are not limited to, the following:

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Our business and operations have experienced rapid growth, and if we do not appropriately manage any future growth or are unable to improve our systems and processes, our business, financial condition, results of operations and prospects will be adversely affected.


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If we are unable to increase sales of our solution to new customers and sell additional products to our existing customers, our future revenue and operating results will be harmed.


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If our existing customers terminate or do not renew their subscriptions, it could have an adverse effect on our business and results of operations.


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We rely significantly on revenue from subscriptions, which may decline and, because we recognize revenue from subscriptions over the term of the relevant subscription period, downturns or upturns in sales are not immediately reflected in full in our results of operations.


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One of our marketing strategies is to offer free open source and trial versions of our products, and we may not be able to realize the benefits of this strategy.


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The market for our big data and cloud integration products is new, unproven and evolving, and our future success depends on the growth and expansion of such market and our ability to adapt and respond effectively to an evolving market.


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Our relatively limited operating history makes it difficult to evaluate our current business and prospects and may increase the risks associated with your investment.


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We have a history of losses and may not be able to achieve profitability or positive cash flows on a consistent basis. If we cannot achieve profitability or positive cash flows, our business, financial condition, and results of operations may suffer.


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We face intense competition in our market, especially from larger well-established companies, and we may lack sufficient financial or other resources to maintain or improve our competitive position.


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Because of the characteristics of open source software, there are few technological barriers to entry into the open source market by new competitors and it may be relatively easy for competitors, some of whom may have greater resources than we have, to enter our markets and compete with us.

Our Corporate Information

We were organized as a société par actions simplifiée, or S.A.S., under the laws of the French Republic on September 19, 2005 and subsequently converted into a société anonyme, or S.A., on April 14, 2006. We are registered with the French Commerce and Companies Register under the number 484 175 252 RCS Nanterre. Our registered office is located at 9, rue Pages, 92150 Suresnes, France. Our telephone number at this address is +33 (0) 1 46 25 06 00. Our main place of business in the United States is located at 800 Bridge Parkway, Suite 200, Redwood City, CA 94065. Our telephone number at this address is (650) 539-3200. Our website is www.talend.com. Information contained on our website is not part of this prospectus. Our agent for service of process in the United States is our wholly owned subsidiary, Talend, Inc., a Delaware corporation, located at 800 Bridge Parkway, Suite 200, Redwood City, CA 94065.