Summary:

Big data startup HStreaming is now part of Swiss advertising firm Adello Group. HStreaming had standout technology by all accounts, but the business never scaled enough to survive in a tough market.

HStreaming, the San Francisco-based startup that had built a platform for doing stream processing on top of Hadoop and raised a $1 million seed round in February, has been acquired by Swiss advertising platform Adello Group. Rumors began emerging weeks ago that something was up at HStreaming and then last week, under the radar of almost everyone, Adello announced its acquisition.

When I finally got on the phone Thursday morning with HStreaming’s only investor, Chris Lynch of Atlas Venture, he expressed some disappointment over the outcome. Not resentment toward the founders — husband and wife Volkmar and Jana Uhlig — for deciding to sell because they didn’t want to play the startup game, but more a sense of lost opportunity. “The technology was incredible and there was a lot they could do with it,” Lynch said.

Volkmar Uhlig is now CTO of Adello, and Jana Uhlig is CMO.

As a reminder, here’s how I described HStreaming back in February:

“HStreaming … has built a complete system that incorporates its real-time engine for processing streams of video, server, sensor and other machine-generated data, but also is wholly compatible with Hadoop as an archiving and batch-processing system. It also plugs into a wide variety of existing BI tools for analytics.”

hstreaming

Here’s how Lynch described its promise:

“The technology has no practical limitations, but we have to market the company. … Watch what happens in the next six months. … I sold 800 customers at Vertica before I sold the company [to HP], and every one of them is going to want HStreaming.”

And actually, Lynch noted, some customers did come looking for HStreaming. Adello apparently liked the technology enough to buy the company. The problem was scaling the company enough to go out and reach those other 700-plus customers.

As I explained in August, doing a big data startup can be hard, especially if you’re selling infrastructure software. You have to be in it for the long haul, and you must be prepared to invest a lot of time and money in R&D and also engaging a market that might need a little education on why your technology matters.

Or, as Lynch summed up the secret to building a startup that exits for hundreds of millions, or even billions: “Companies are bought, they’re not sold.” If you do it right and for the right reasons, buyers will be lining up in due time.

Feature image courtesy of Shutterstock user Andy Dean Photography.

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