Category Archives: Tech News

Grading the final tech IPOs of 2019

Posted by on 13 December, 2019

This post was originally published on this site

As the holiday slowdown looms, the final U.S.-listed technology IPOs have come in and begun to trade.

Three tech, tech-ish or venture-backed companies went public this week: Bill.com, Sprout Social and EHang. Let’s quickly review how each has performed thus far. These are, bear in mind, the last IPOs of the year that we care about, pending something incredible happening. 2020 will bring all sorts of fun, but, for this time ’round the sun, we’re done.

Pricing

Our three companies managed to each price differently. So, we have some variety to discuss. Here’s how each managed during their IPO run:

How do those results stack up against their final private valuations? Doing the best we can, here’s how they compare:

So EHang priced low and its IPO is hard to vet, as we’re guessing at its final private worth. We’ll give it a passing grade. Sprout Social priced mid-range, and managed a slight valuation bump. We can give that a B, or B+. Bill.com managed to price above its raised range, boosting its valuation sharply in the process. That’s worth an A.

Performance

Trading just wrapped, so how have our companies performed thus far in their nascent lives as public companies? Here’s the scorecard:

  • EHang’s Friday closing price: $12.90 (+3.2%)
  • Sprout Social’s Friday closing price: $16.60 (-2.35%)
  • Bill.com’s Friday closing price: $38.83 (+76.5%)

You can gist out the grades somewhat easily here, with one caveat. The Bill.com IPO’s massive early success has caused the usual complaints that the firm was underpriced by its bankers, and was thus robbed to some degree. This argument makes the assumption that the public market’s initial pricing of the company once it began trading is reasonable (maybe!) and that the company in question could have captured most or all of that value (maybe!).

Bill.com’s CEO’s reaction to the matter puts a new spin on it, but you should at least know that the week’s most successful IPO has attracted criticism for being too successful. So forget any chance of an A+.

Image via Getty Images / Somyot Techapuwapat / EyeEm

Adobe turns it up to 11, surpassing $11B in revenue

Posted by on 13 December, 2019

This post was originally published on this site

Yesterday, Adobe submitted its quarterly earnings report and the results were quite good. The company generated a tad under $3 billion for the quarter at $2.99 billion, and reported that revenue exceeded $11 billion for FY 2019, its highest ever mark.

“Fiscal 2019 was a phenomenal year for Adobe as we exceeded $11 billion in revenue, a significant milestone for the company. Our record revenue and EPS performance in 2019 makes us one of the largest, most diversified, and profitable software companies in the world. Total Adobe revenue was $11.17 billion in FY 2019, which represents 24% annual growth,” Adobe CEO Shantanu Narayen told analysts and reporters in his company’s post-earnings call.

Adobe made a couple of key M&A moves this year that appear to be paying off, including nabbing Magento in May for $1.7 billion and Marketo in September for $4.75 billion. Both companies fit inside its “Digital Experience” revenue bucket. In its most recent quarter, Adobe’s Digital Experience segment generated $859 million in revenue, compared with $821 million in the sequentially previous quarter.

Obviously buying two significant companies this year helped push those numbers, something CFO John Murphy acknowledged in the call:

“Key Q4 highlights include strong year-over-year growth in our Content and Commerce solutions led by Adobe Experience Manager and success with cross-selling and up-selling Magento; Adoption of Adobe Experience Platform, Audience Manager and Real-Time CDP in our Data & Insights solutions; and momentum in our Marketo business, including in the mid-market segment, which helped fuel growth in our Customer Journey Management solutions.”

All of that added up to growth across the Digital Experience category.

But Adobe didn’t simply buy its way to new market share. The company also continued to build a suite of products in-house to help grow new revenue from the enterprise side of its business.

“We’re rapidly evolving our CXM product strategy to deliver generational technology platforms, launch innovative new services and introduce enhancements to our market-leading applications. Adobe Experience Platform is the industry’s first purpose-built CXM platform. With real-time customer profiles, continuous intelligence, and an open and extensible architecture, Adobe Experience Platform makes delivering personalized customer experiences at scale a reality,” Narayan said.

Of course, the enterprise is just part of it. Adobe’s creative tools remain its bread and butter with the Creative tools accounting for $1.74 billion in revenue and Document Cloud adding another $339 million this quarter.

The company is talking confidently about 2020, as its recent acquisitions mature and become a bigger part of the company’s digital experience offerings. But Narayan feels good about the performance this year in digital experience: “When I take a step back and look at what’s happened during the year, I feel really good about the amount of innovation that’s happening. And the second thing I feel really good about is the alignment across Magento, Marketo and just call it, the core DX business in terms of having a more unified and aligned go-to-market, which has not only helped our results, but it’s also helped the operating expense associated with that business,” he said.

It is no small feat for any software company to surpass $11 billion in trailing revenue. Consider that Adobe, which was founded in 1982, goes back to the earliest days of desktop PC software in the 1980s. Yet it has managed to transform into a massive cloud services company over the last five years under Narayan’s leadership and flourish there.

Chicago’s Sprout Social prices IPO mid-range at $17 per share, raising $150M

Posted by on 13 December, 2019

This post was originally published on this site

On the heels of Bill.com’s debut, Chicago-based social media software company Sprout Social priced its IPO last night at $17 per share, in the middle of its proposed $16 to $18 per-share range. Selling 8.8 million shares, Sprout raised just under $150 million in its debut.

Underwriters have the option to purchase an additional 1.3 million shares if they so choose.

The IPO is a good result for the company’s investors (Lightbank, New Enterprise Associates, Goldman Sachs, and Future Fund), but also for Chicago, a growing startup scene that doesn’t often get its due in the public mind.

At $17 per share, not including the possible underwriter option, Sprout Social is worth about $814 million. That’s just a hair over its final private valuation set during its $40.5 million Series D in December of 2018. That particular investment valued Sprout at $800.5 million, according to Crunchbase data.

So what?

Sprout’s debut is interesting for a few reasons. First, the company raised just a little over $110 million while private, and will generate over $100 million in trailing GAAP revenue this year. In effect, Sprout Social used less than $110 million to build up over $100 million in annual recurring revenue (ARR) — the firm reached the $100 million ARR mark in between Q2 and Q3 of 2019. That’s a remarkably efficient result for the unicorn era.

And the company is interesting as it gives us a look at how investors value slower-growth SaaS companies. As we’ve written, Sprout Social grew by a little over 30% in the first three quarters of 2019. That’s a healthy rate, but not as fast as, say, Bill.com . (Bill.com’s strong market response puts its own growth rate in context.)

Thinking very loosely, Sprout Social closed Q3 2019 with ARR of about $105 million. Worth $814 million now, we can surmise that Sprout priced at an ARR multiple of about 7.75x. Thats a useful benchmark for private companies that sell software: if you want a higher multiple when you go public, you’ll have to grow a little faster.

All the same, the IPO is a win for Chicago, and a win for their number of investors. We’ll update this piece later with how the stock performs, once it begins to trade.

Salesforce promotes Bret Taylor to president and COO

Posted by on 12 December, 2019

This post was originally published on this site

Salesforce announced today that it has named Bret Taylor as president and chief operating officer of the company. Prior to today’s promotion, Taylor held the position of president and chief product officer.

In his new position, Taylor will be responsible for a number of activities including leading Salesforce’s global product vision, engineering, security, marketing and communications. That’s a big job, and as such he will report directly to chairman Marc Benioff.

Taylor has had increasing responsibilities over the last couple of years, taking the lead on many of Salesforce’s biggest announcements at Dreamforce, the company’s massive yearly customer conference. In fact, Benioff said in a statement that Taylor has already been responsible for product vision, development and go-to-market strategy prior to today’s promotion.

“His expanded portfolio of responsibilities will enable us to drive even greater customer success and innovation as we experience rapid growth at scale,” Benioff said in the statement.

Brent Leary, founder at CRM Essentials, who has been watching the company since its earliest days, says it feels like this could be part of succession plan down the road. This promotion could be a signal that Taylor is being groomed to take over for Benioff and co-CEO Keith Block whenever they decide to move on.

“It’s been feeling like he’s being groomed for the big chair somewhere down the line. He’s a generation behind the current leadership, but his experiences at startups and creating iconic technologies at iconic companies uniquely positioned him for a move like this at a company like Salesforce,” Leary told TechCrunch.

Taylor came to Salesforce when the company purchased Quip in August 2016 for $750 million. He was promoted to president and chief product officer in November 2017. Prior to launching Quip he was chief technology officer at Facebook.

Why Bill.com didn’t pursue a direct listing

Posted by on 12 December, 2019

This post was originally published on this site

Bill.com went public today after pricing its shares higher than it initially expected. The B2B payments company sold nearly 10 million shares at $22 apiece, raising around $216 million in its IPO. Public investors felt that the company’s price was a deal, sending the value of its equity to $35.51 per share as of the time of writing.

That’s a gain of over 61%.

On the heels of its successful pricing run and raucous first day’s trading, TechCrunch caught up with Bill.com CEO René Lacerte to dig into his company’s debut. We wanted to know how pricing went, and whether the company (which possibly could have valued itself more richly during its IPO pricing, given its first-day pop) had considered a direct listing.

Lacerte detailed what resonated with investors while pricing Bill.com’s shares, and also did a good job outlining his perspective on what matters for companies that are going public. As a spoiler, he wasn’t super focused on the company’s first-day return.

For more on the Bill.com IPO’s nuts and bolts, head here. Let’s get into the interview.

René Lacerte

The following interview has been edited for length and clarity. Questions have been condensed.

TechCrunch: How did your IPO pricing feel, and what did you learn from the process?

Lacerte: I think the whole experience has been an incredible learning experience from a capitalism perspective; that’s probably a broader conversation. But you know, it really came down to how our story resonated with investors, and so there’s three components that we kind of really talked to folks about.

DataRobot is acquiring Paxata to add data prep to machine learning platform

Posted by on 12 December, 2019

This post was originally published on this site

DataRobot, a company best known for creating automated machine learning models known as AutoML, announced today that it intends to acquire Paxata, a data prep platform startup. The companies did not reveal the purchase price.

Paxata raised a total of $90 million before today’s acquisition, according to the company.

Up until now, DataRobot has concentrated mostly on the machine learning and data science aspect of the workflow — building and testing the model, then putting it into production. The data prep was left to other vendors like Paxata, but DataRobot, which raised $206 million in September, saw an opportunity to fill in a gap in their platform with Paxata.

“We’ve identified, because we’ve been focused on machine learning for so long, a number of key data prep capabilities that are required for machine learning to be successful. And so we see an opportunity to really build out a unique and compelling data prep for machine learning offering that’s powered by the Paxata product, but takes the knowledge and understanding and the integration with the machine learning platform from DataRobot,” Phil Gurbacki, SVP of product development and customer experience at DataRobot, told TechCrunch.

Prakash Nanduri, CEO and co-founder at Paxata, says the two companies were a great fit and it made a lot of sense to come together. “DataRobot has got a significant number of customers, and every one of their customers have a data and information management problem. For us, the deal allows us to rapidly increase the number of customers that are able to go from data to value. By coming together, the value to the customer is increased at an exponential level,” he explained.

DataRobot is based in Boston, while Paxata is in Redwood City, Calif. The plan moving forward is to make Paxata a west coast office, and all of the company’s almost 100 employees will become part of DataRobot when the deal closes.

While the two companies are working together to integrate Paxata more fully into the DataRobot platform, the companies also plan to let Paxata continue to exist as a standalone product.

DataRobot has raised more than $431 million, according to PitchBook data. It raised $206 million of that in its last round. At the time, the company indicated it would be looking for acquisition opportunities when it made sense.

This match-up seems particularly good, given how well the two companies’ capabilities complement one another, and how much customer overlap they have. The deal is expected to close before the end of the year.

Acquia nabs CDP startup AgilOne, which raised $41M

Posted by on 11 December, 2019

This post was originally published on this site

Acquia announced it has acquired customer data platform (CDP) startup AgilOne today. The companies did not disclose the purchase price.

CDPs are all the rage among customer experience vendors, as they provide a way to pull data from a variety of channels to build a more complete picture of the customer. The goal here is to deliver meaningful content to the customer based on what you know about them. Having a platform like this to draw upon makes it more likely that you will hit the target more accurately.

Acquia co-founder and CTO Dries Buytaert says he has been watching this space for the last year, and wanted to add this piece to the Acquia tool chest. “Adding a CDP like AgilOne to our existing platform will help our customers unify their data across various tools in their technology stack to drive better, more personal customer experiences,” he said.

In particular, he says he liked AgilOne because it used an intelligence layer while building the customer record. “What sets AgilOne apart from other CDPs are its machine learning capabilities, which intelligently segment customers and predict customer behaviors (such as when a customer is likely to purchase something). This allows for the creation and optimization of next-best action models to optimize offers and messages to customers on a 1:1 basis.”

Like most startup founders, AgilOne CEO Omer Artun sees this as an opportunity to grow his company, probably faster than he could have on his own. “Since AgilOne’s inception, our vision has been to give marketers the direct power to understand who their customers are and engage with them in a genuine way in order to boost profitability and create the omnichannel experiences that customers crave. Through this acquisition, Acquia will enable us to continue to deliver, and build upon, this vision,” he wrote in a blog post announcing the acquisition.

Tony Byrne, founder and principal analyst at the Real Story Group, has been watching the marketing automation space for some time, as well as the burgeoning CDP market. He sees this move as good for Acquia, but wonders how it will fit with other pieces in the Acquia stack. “This in theory allows them to support the unification of customer data across their suite,” Byrne told TechCrunch.

But he cautions that the company could struggle incorporating AgilOne into its platform. “The Marketing Automation platform they purchased targets mostly B2B. AgilOne is dialed in on B2C use cases and a fairly narrow set of vertical segments. It will take a lot of work to make it into a CDP that could adequately serve Acquia’s diverse customer base,” he said.

Acquia was acquired by Vista Equity Partners for $1 billion in September, and it tends to encourage its companies to be more acquisitive than they might have been on their own. “Vista has been supportive of our M&A strategy and believes strongly in AgilOne as a part of Acquia’s vision to redefine the customer experience stack,” Buytaert said.

AgilOne raised over $41 million, according to PitchBook data. Investors included Tenaya Capital, Sequoia Capital and Mayfield Fund. It had a post valuation of just over $115 million and was pegged as likely acquisition target by Pitchbook.

AgilOne customers will be happy to hear that Acquia plans to continue to sell it as a stand-alone product in addition to making it part of the Acquia Open Marketing Cloud.

Hyperproof wants to make it easier to comply with GDPR and other regulations

Posted by on 11 December, 2019

This post was originally published on this site

As companies try to figure out how to comply with regulations like GDPR, ISO or Sarbanes Oxley, they face a huge challenge just getting started. Hyperproof, a Bellevue, Washington startup, is launching a new product to help companies build a workflow to get them in compliance in a more organized way.

Company co-founder and CEO Craig Unger says most companies struggle with the complexity of compliance. It involves a lot of different activities and often requires the cooperation of employees, who typically aren’t involved in compliance.

Hyperproof wants to provide a single place where companies can undertake their compliance activities. “In reality, there’s no single place where if you’re a compliance officer, you can say, ‘here is where I do my work’. Here is the equivalent of my SAP system for a CFO or my CRM system for a head of sales or head of marketing — and Hyperproof is just that,” Unger explained.

He says most companies do compliance today in a fairly ad hoc way, relying on technology like spreadsheets to track tasks, and email to make requests for needed information. What Hyperproof does is package all of that into a single program. You indicate what compliance regimen you want to work with, and Hyperproof builds a workspace for you with all of the requirements you need for that compliance framework.

Unger says at this point, the company is simply putting all of the tasks in a single workflow to simplify and organize your activities around this compliance framework.You can also import a spreadsheet to get that information inside Hyperproof, or outline the requirements in your own language in the program.

“Once you have a defined program in place, you can start working with the rest of the organization in a collaborative way by sending emails. The evidence that comes back gets put inside Hyperproof as an immutable record with an audit trail around this data collection,” Unger explained. Should you get audited, you have a central place to show the auditor your work.

The company has concentrated on building the workflow part of this, but in the future wants to add automation and APIs to connect directly to other systems to automate many of the activities. The goal with the initial release was to get companies a compliance framework workflow, and then build on that in the future.

The company was founded last year and has raised $3 million from 23 angel investors in the Seattle area where they are based. In fact, Unger is a former Microsoft employee and also helped found Azuqua, a workflow startup he sold to Okta this year for $52.5 million.

Refocusing on relocation, Jobbatical launches new offices in Spain and Germany

Posted by on 11 December, 2019

This post was originally published on this site

I’ve been following Estonia-headquartered Jobbatical and its founder, Karoli Hindriks, for years. Part of the vanguard of startups working on infrastructure for digital nomads, the startup has been building the base platform to help global job seekers hire and fire their governments.

As Jobbatical has worked with more and more companies and governments though, it has learned that the friction here is not just finding employment globally for talented individuals, but rather the actual process of applying for immigration and work permits, ranging from forms that must be filed in person to the hours of labor it can take to fill out an application.

“What started to happen was that the relocation part… became something that the clients came back to us and said, ‘Can you do relocation for everyone and not just those coming through Jobbatical?’” Hindriks explained.

Last year, Jobbatical began to refocus its platform on powering relocation for workers at companies, and now its new strategy is coming into focus with the launch of the company’s new offices in Spain and Germany, announced on stage earlier today at TechCrunch Disrupt Berlin.

In the process, the company hopes to not just make the immigration process easier — but also much faster.

“How much time are government officials doing dummy work?” Hindriks asked. “30-40% of the consulate’s time is spent on answering the question of ‘what is the status of my visa?’”

The problem is that feedback in the immigration system is not available to all the players involved. Immigration process agents at companies who handle their workers’ visas have to constantly search around to make sure they are moving each of their cases forward. Managers have no idea when their workers may move, while employees are kept in the dark about their current status, inducing anxiety.

Hindriks’ vision is to help each of these three sides use a “TurboTax for immigration” to streamline the process. Jobbatical now can handle immigration applications in Estonia, Germany, and Spain and hopes to add Finland early next year.

But the more ambitious vision is ultimately to help governments drive their processes faster. Similar to how, say, the U.S. tax agency the Internal Revenue Service offers eFiling, Hindriks sees a future where Jobbatical can help facilitate immigration filings and massively speed up the efficiency of governments around these processes by allowing workers to directly submit applications to the government. She is working with two countries today to create exactly these sorts of digital submission systems.

It’s a space that has heated up in recent years as immigration continues to flow across the world. Boundless, for instance, helps individuals apply for U.S. green cards. Jobbatical is focused on the B2B market, focused on companies with global workforces.

Despite the deep debate in many countries over immigration, the reality is that every country has skills deficits that can be helped with smart and efficient immigration. Jobbatical is one company that may make the system more fair and relaxing for stressed workers looking to build their international careers.

Accel and Index back Tines, as the cybersecurity startup adds another $11M to its Series A

Posted by on 11 December, 2019

This post was originally published on this site

It was just a couple of months ago that Tines, the cybersecurity automation startup, raised $4.1 million in Series A funding led by Blossom Capital, and now the Dublin-based company is disclosing an $11 million extension to the round.

This additional Series A funding is led by venture capital firm Accel, with participation from Index Ventures and previous backer Blossom Capital. The extra cash will be used to continue developing its cybersecurity automation platform and for further expansion into the U.S. and Europe.

Founded in February 2018 by ex-eBay, PayPal and DocuSign security engineer Eoin Hinchy, and subsequently joined by former eBay and DocuSign colleague Thomas Kinsella, Tines automates many of the repetitive manual tasks faced by security analysts so they can focus on other high-priority work. The pair had bootstrapped the company as recently as October.

“It was while I was at DocuSign that I felt there was a need for a platform like Tines,” explained Hinchy at the time of the initial Series A. “We had a team of really talented engineers in charge of incident response and forensics but they weren’t developers. I found they were doing the same tasks over and over again so I began looking for a platform to automate these repetitive tasks and didn’t find anything. Certainly nothing that did what we needed it to, so I came up with the idea to plug this gap in the market.”

To remedy this, Tines lets companies automate parts of their manual security processes with the help of six software “agents,” with each acting as a multipurpose building block. The idea is that, regardless of the process being automated, it only requires combinations of these six agent types configured in different ways to replicate a particular workflow.

In addition, the platform doesn’t rely on pre-built integrations to interact with external systems. Instead, Tines is able to plug in to any system that has an API. “This means integration with commercial, off-the-shelf products, or existing in-house tools is quick and simple, with most security teams automating stories (workflows) within the first 24 hours,” says the startup. Its software is also starting to find utility beyond cybersecurity processes, with several Tines customers using it in IT, DevOps, and HR.

“We heard that Eoin, a senior member of the security team at DocuSign (another Accel portfolio company), had recently left to start Tines, so we got in touch,” Accel’s Seth Pierrepont tells TechCrunch. “They were in the final stages of closing their Series A. However, we were so convinced by the founders, their product approach, and the market timing, that we asked them to extend the round”.

Pierrepont also points out that a unique aspect of the Dublin ecosystem is that many of the world’s largest tech companies have their European headquarters in the country (often attracted by relatively low corporation tax), “so it’s an incredibly rich talent pool despite being a relatively small city”.

Asked whether Accel views Tines as a cybersecurity automation company or a more general automation play that puts automation in the hands of non-technical employees for a multitude of possible use cases, Pierrepont says, given Hinchy and Kinsella’s backgrounds, the cybersecurity automation sector should be the primary focus for the company in the short term. However, longer term it is likely that Tines will be adopted across other functions as well.

“From our investment in Demisto (which was acquired by Palo Alto Networks earlier this year), we know the security automation or SOAR category (as Gartner defines it) very well,” he says. “Demisto pioneered the category and was definitively the market leader when it was acquired. However, we think the category is just getting started and that there is still a ton of whitespace for Tines to go after”.

Meanwhile, in less than a year, Tines says it has on-boarded 10 enterprise customers across a variety of industries, including Box, Auth0 and McKesson, with companies automating on average 100 thousand actions per day.

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