MariaDB Goes Private After Tumultuous Public Run, Acquired by K1 Investment Management

After a rollercoaster 18 months since its initial public offering (IPO), open-source database company MariaDB is set to go private. K1 Investment Management, a private equity firm based in Manhattan Beach, California, has successfully completed a tender offer to acquire 100% of MariaDB’s shares, taking control of the embattled company. The move brings an end to MariaDB’s brief tenure as a publicly listed company, a period marked by a declining stock price, financial instability, and strategic uncertainty.

MariaDB, which was founded as a fork of MySQL in 2009, became publicly traded in late 2022 through a special-purpose acquisition company (SPAC) merger. Initially valued at $672 million, MariaDB’s stock quickly plummeted, reaching a market cap of less than $12 million by early 2024. K1’s $37.3 million offer, equivalent to $0.55 per share, was a 189% premium on MariaDB’s share price in February when the deal was first proposed.

Leadership Shakeup and Strategic Shift

With the acquisition, MariaDB has appointed a new CEO, Rohit de Souza, a tech veteran with experience at MicroFocus, HP, and Oracle. De Souza takes over from Paul O’Brien, who had been at the helm since January 2023. O’Brien will remain with the company as an advisor. De Souza expressed optimism about the new direction under K1’s ownership, stating, “With K1’s support, we are poised to expand our capabilities and continue delivering the innovative database solutions our customers rely on.”

K1’s acquisition comes at a crucial time for MariaDB, which had been navigating financial difficulties throughout 2023, including job cuts, the shuttering of strategic products, and restructuring efforts to secure new capital. Most recently, in October, the company announced it was cutting 28% of its workforce and discontinuing several product lines, moves that baffled industry analysts.

A Bumpy IPO and Decline

MariaDB’s IPO was expected to signal a new era for the company, which had carved out a niche in the database industry by offering an open-source alternative to MySQL. However, the company struggled to meet market expectations. Following its IPO, MariaDB faced a series of financial setbacks, culminating in an April 2023 “going concern” warning over its medium-term viability.

By August 2023, MariaDB had secured a new $26.5 million loan facility, but the company’s inability to generate sufficient revenue led to further job cuts and product discontinuations, including its SkySQL DBaaS offering, which was spun off into a separate entity.

K1’s Vision for MariaDB

K1’s acquisition marks its third take-private deal in two years, signaling its interest in turning around struggling tech firms. With this latest acquisition, K1 aims to push product innovation and solidify MariaDB’s customer base, which includes prominent clients such as the U.S. Department of Defense, Nokia, RedHat, and Deutsche Bank.

The future focus for MariaDB under K1’s ownership is likely to center on AI and cloud-native solutions, aligning with industry trends. “This partnership allows us to further product innovation, advancing our ability to support new workloads driven by AI and the cloud,” De Souza said. “We remain focused on making it easier for customers to transition from costly alternatives and meet the rapidly growing demands for AI and cloud-based solutions.”

The MariaDB Foundation Stays Strong

Despite the challenges facing MariaDB plc, the open-source community surrounding the MariaDB database remains vibrant. The MariaDB Foundation, which oversees the governance of the core open-source project, continues its work independently of the private equity takeover. Last year, the foundation signed Amazon Web Services (AWS) as its first “diamond” sponsor, ensuring continued support for the community-driven development of MariaDB.

Looking ahead, the foundation is focused on integrating advanced features like vector search, a crucial component for AI-driven applications, into its database product. This ongoing innovation will help keep the open-source MariaDB competitive as the company transitions to private ownership.

A New Chapter Begins

For MariaDB, the move to private ownership represents a fresh start. After a challenging public run, K1’s acquisition provides an opportunity to restructure, refocus, and revitalize its offerings in a rapidly changing industry. With AI and cloud technologies becoming increasingly integral to modern database solutions, MariaDB has the potential to regain its footing and once again become a key player in the tech landscape.

David Thompson
Financial Desk