Ethan Ding sees the last decade of SaaS as a historical glitch.
“In 30 years, we’re going to look back and say ‘oh, remember that period of time where those crazy software companies were selling seats for 90 to 95% margins?’” he said. “We’ll look back on that the same way we look back on mercantilism. ‘Remember when the East India Trading Company could move spice?’”
Ding—who went from growing up in a fishing village in China to spending years as a venture capital data junkie—has a unique vantage point on the so-called SaaSpocalypse. Ding is the CEO and cofounder of TextQL, a startup using AI agents to replace the laggard, consultant‑driven process of analytics with a speedy, plain language‑based interface. Data has long been at the center of the rise of enterprise software—and internal company data has always been difficult to wrangle in a way that AI is changing rapidly.
On one hand, AI is about to clean up messy enterprise data, says Ding. On the other hand, that means more people than ever are going to be asking questions about that data.
“Analytics is about to experience probably the most violent Jevons paradox anybody’s seen in a very long time,” said Ding, referencing the 161-year-old theory that more technological efficiency leads to more usage, not less. “Today, the cost of asking a question to seeing a chart that tells you what to do… is two weeks, a person, maybe $5,000–$10,000 of salary spent chasing those numbers down. With language models, with what we’ve built… you’re looking at an increase of five to six orders of magnitude, all‑in.”
Ding cofounded TextQL in 2022 with Mark Hay, and just closed $17 million in strategic investment led by Blackstone’s early-stage investment arm, Blackstone Innovations Investments, Fortune has exclusively learned. There’s a natural question here: Does Ding worry that what he’s doing with analytics can be easily replicated by the large AI labs? We’ve seen versions of this before, especially around coding: A few successful startups prove the market out, and OpenAI and Anthropic then swoop in with their own product (and the full force of their balance sheets).
“I’m vaguely self‑aware that Anthropic wants to have this ecosystem of companies building within all the verticals,” said Ding. “And if a vertical grows fast enough, they want to run after it.”
In the short-term, Ding says he’s not worried, that he believes the challenges will only start when AI analytics produces its own $100 million ARR winner. In the meantime, his plan is to build in low‑liquidity markets like financial services and healthcare. Blackstone CTO John Stecher believes that, while the large labs remain “critical enablers,” they aren’t necessarily equipped to handle the enterprise data problem.
“The challenge enterprises are running into isn’t model capability; it is making AI work reliably, securely, and cost-effectively on real, messy internal data with the right security, governance, and cost controls,” Stecher wrote to Fortune.
Ding brings up a good point, ultimately: That for all the talk around how data and AI are entwined, the foliage of the data jungle has proven much harder to slash through than people were anticipating even 18 months ago. But how we engage with asking questions of our data at work, inevitably, will look very different.
“What does analytics look like in 150,000 years?” he said. “It probably looks like some entity, probably not human, that asks: ‘Of all the Dyson spheres currently orbiting around Alpha Centauri, how much copper alloy was mined from Titan?’ It’s analytics running autonomously.”
See you Monday,
Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
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VENTURE CAPITAL
- Expo, a San Francisco-based app-building platform, raised $45 million in Series B funding. Georgian led the round and was joined by Leadout Capital, A.Capital Ventures and Red Swan Ventures.
- Resolve AI, a San Francisco-based developer of AI for running and operating software in production, raised $40 million in a Series A extension from Salesforce Ventures and others.
- Sennos, a Durham, N.C.-based developer of automation technology for the fluidics and fermentation industries, raised $20 million in funding from TomEnterprise and Jan Ståhlberg.
- spektr, a Copenhagen, Denmark-based developer of AI infrastructure for compliance in financial services, raised $20 million in Series A funding. NEA led the round and was joined by existing investors.
- Joyful Health, a New York City-based AI financial infrastructure company for health care revenue operations, raised $17 million in Series A funding. CRV led the round and was joined by existing investors.
- InsightFinder AI, a Durham, N.C.-based IT stability and AI reliability platform, raised $15 million in Series B funding. Yu Galaxy led the round.
- Balerion AI, a San Francisco-based agentic AI platform designed for mortgage loan origination, raised $6 million in seed funding. Kleiner Perkins led the round and was joined by BoxGroup and Formation.
- Lua, a London, U.K.-based operating system designed for human agent collaboration in the workplace, raised $5.8 million in funding. Norrsken22 led the round and was joined by Flourish Ventures, 20VC, P1 Ventures, Phosphor Capital, Y Combinator, and angel investors.
- GetWhys, a Boise, Idaho-based go-to-market platform, raised $5.2 million in funding. EPIC Ventures led the round and was joined by CEAS Investments, the Portland Seed Fund, and existing investors.
PRIVATE EQUITY
- TPG is investing $100 million in Zūm, a Redwood City, Calif.-based platform designed to connect students, drivers, and school districts.
- Stellus Rx, a portfolio company of WindRose Health Investors, acquired Tria Health, a Kansas City, Mo.-based pharmacist-led health benefit for individuals with chronic conditions. Financial terms were not disclosed.
EXITS
- One Call acquired Data Dimensions, a Janesville, Wis.-based EDI clearinghouse and technology services provider for the health care, insurance, and government markets, from Thompson Street Capital Partners. Financial terms were not disclosed.
IPOS
- Madison Air Solutions, a Chicago-based indoor air solutions company, raised $2.2 billion in an offering of 82.7 million shares priced at $27 on the New York Stock Exchange.
- Arxis, a Bloomfield, Ct.-based designer and manufacturer of electronics and mechanical parts for the aerospace and defense industries, raised $1.1 billion in an offering of 40.5 million shares priced at $28 on the Nasdaq.
- X-Energy, a Rockville, Md.-based designer of advanced nuclear reactor technology, plans to raise $750 million in an offering of 42.9 million shares priced between $16 and $19 on the Nasdaq. The company posted $109 million in revenue for the year ended December 31.
PEOPLE
- Gigascale Capital, a Palo Alto, Calif.-based venture capital firm, hired John Lilly as an advising partner. Previously, he was with Greylock.
