By Milana Vinn
(Reuters) -Confluent is exploring a sale after attracting acquisition interest, according to three people familiar with the matter, the latest data infrastructure company to draw suitors for its potential in supporting artificial intelligence development.
The software provider is working with an investment bank on the sale process, which is in its early stages and was instigated after both private equity firms and other technology companies expressed their interest to the company in buying it, the sources said.
The company has a market capitalization of approximately $7 billion, but its stock is trading around 26% lower year-to-date. Some of the sources noted while Confluent’s technology is highly sought-after, it became vulnerable to takeover approaches when its stock price dived in July, when it reported losing business from a large customer.
The sources cautioned that no deal is guaranteed and Confluent could ultimately remain independent. They also spoke on condition of anonymity because the discussions are confidential.
Confluent did not immediately respond to a comment request.
Mountain View, California-based Confluent provides technology needed to manage massive, real-time data streams for artificial intelligence models.
The company was founded by the original creators of Apache Kafka, a popular open-source technology that helps companies process huge torrents of data in real time, from bank transactions to website clicks. Confluent commercializes Kafka, providing enterprise-grade features, services, and support to major corporations worldwide.
The interest in Confluent highlights a surge in demand for data infrastructure companies, fueled by the corporate race to develop generative artificial intelligence. In May, Salesforce agreed to acquire software maker Informatica for approximately $8 billion to bolster its AI capabilities by integrating Informatica’s data management, integration, and governance tools into the Salesforce platform.
(Reporting by Milana Vinn in New York; Editing by David French and Christopher Cushing)
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