Vista Equity takes minority stake in Canada’s Vena with $242M investment

Vena, a Canadian company focused on the Corporate Performance Management (CPM) software space, has raised $242 million in Series C funding from Vista Equity Partners.

As part of the financing, Vista Equity is taking a minority stake in the company. The round follows $25 million in financing from CIBC Innovation Banking last September, and brings Vena’s total raised since its 2011 inception to over $363 million.

Vena declined to provide any financial metrics or the valuation at which the new capital was raised, saying only that its “consistent growth and…strong customer retention and satisfaction metrics created real demand” as it considered raising its C round.

The company was originally founded as a B2B provider of planning, budgeting and forecasting software. Over time, it’s evolved into what it describes as a “fully cloud-native, corporate performance management platform” that aims to empower finance, operations and business leaders to “Plan to Growtheir businesses. Its customers hail from a variety of industries, including banking, SaaS, manufacturing, healthcare, insurance and higher education. Among its over 900 customers are the Kansas City Chiefs, Coca-Cola Consolidated, World Vision International and ELF Cosmetics.

Vena CEO Hunter Madeley told TechCrunch the latest raise is “mostly an acceleration story for Vena, rather than charting new paths.”

The company plans to use its new funds to build out and enable its go-to-market efforts as well as invest in its product development roadmap. It’s not really looking to enter new markets, considering it’s seeing what it describes as “tremendous demand” in the markets it currently serves directly and through its partner network.

“While we support customers across the globe, we’ll stay focused on growing our North American, U.K. and European business in the near term,” Madeley said.

Vena says it leverages the “flexibility and familiarity” of an Excel interface within its “secure” Complete Planning platform. That platform, it adds, brings people, processes and systems into a single source solution to help organizations automate and streamline finance-led processes, accelerate complex business processes and “connect the dots between departments and plan with the power of unified data.”            

Early backers JMI Equity and Centana Growth Partners will remain active, partnering with Vista “to help support Vena’s continued momentum,” the company said. As part of the raise, Vista Equity Managing Director Kim Eaton and Marc Teillon, senior managing director and co-head of Vista’s Foundation Fund, will join the company’s board.

“The pandemic has emphasized the need for agile financial planning processes as companies respond to quickly-changing market conditions, and Vena is uniquely positioned to help businesses address the challenges required to scale their processes through this pandemic and beyond,” said Eaton in a written statement. 

Vena currently has more than 450 employees across the U.S., Canada and the U.K., up from 393 last year at this time.

#banking, #business-process-management, #canada, #coca-cola, #enterprise, #exit, #finance, #funding, #fundings-exits, #healthcare, #information-technology, #ma, #manufacturing, #private-equity, #recent-funding, #startups, #tc, #united-kingdom, #vista-equity-partners

0

Drupal’s journey from dorm-room project to billion-dollar exit

Twenty years ago Drupal and Acquia founder Dries Buytaert was a college student at the University of Antwerp. He wanted to put his burgeoning programming skills to work by building a communications tool for his dorm. That simple idea evolved over time into the open-source Drupal web content management system, and eventually a commercial company called Acquia built on top of it.

Buytaert would later raise over $180 million and exit in 2019 when the company was acquired by Vista Equity Partners for $1 billion, but it took 18 years of hard work to reach that point.

When Drupal came along in the early 2000s, it wasn’t the only open-source option, but it was part of a major movement toward giving companies options by democratizing web content management.

Many startups are built on open source today, but back in the early 2000s, there were only a few trail blazers and none that had taken the path that Acquia took. Buytaert and his co-founders decided to reduce the complexity of configuring a Drupal installation by building a hosted cloud service.

That seems like a no-brainer now, but consider at the time in 2009, AWS was still a fledgling side project at Amazon, not the $45 billion behemoth it is today. In 2021, building a startup on top of an open-source project with a SaaS version is a proven and common strategy. Back then nobody else had done it. As it turned out, taking the path less traveled worked out well for Acquia.

Moving from dorm room to billion-dollar exit is the dream of every startup founder. Buytaert got there by being bold, working hard and thinking big. His story is compelling, but it also offers lessons for startup founders who also want to build something big.

Born in the proverbial dorm room

In the days before everyone had internet access and a phone in their pockets, Buytaert simply wanted to build a way for him and his friends to communicate in a centralized way. “I wanted to build kind of an internal message board really to communicate with the other people in the dorm, and it was literally talking about things like ‘Hey, let’s grab a drink at 8:00,’” Buytaert told me.

He also wanted to hone his programming skills. “At the same time I wanted to learn about PHP and MySQL, which at the time were emerging technologies, and so I figured I would spend a few evenings putting together a basic message board using PHP and MySQL, so that I could learn about these technologies, and then actually have something that we could use.”

The resulting product served its purpose well, but when graduation beckoned, Buytaert realized if he unplugged his PC and moved on, the community he had built would die. At that point, he decided to move the site to the public internet and named it drop.org, which was actually an accident. Originally, he meant to register dorp.org because “dorp” is Dutch for “village or small community,” but he mistakenly inverted the letters during registration.

Buytaert continued adding features to drop.org like diaries (a precursor to blogging) and RSS feeds. Eventually, he came up with the idea of open-sourcing the software that ran the site, calling it Drupal.

The birth of web content management

About the same time Buytaert was developing the basis of what would become Drupal, web content management (WCM) was a fresh market. Early websites had been fairly simple and straightforward, but they were growing more complex in the late 90s and a bunch of startups were trying to solve the problem of managing them. Buytaert likely didn’t know it, but there was an industry waiting for an open-source tool like Drupal.

#acquia, #cloud, #dries-buytaert, #drupal, #ec-enterprise-applications, #ec-entrepreneurship, #enterprise, #fundings-exits, #ma, #open-source, #saas, #tc, #vista-equity-partners, #web-content-management

0

Citrix is acquiring Wrike from Vista for $2.25B

Citrix announced today that it plans to acquire Wrike, a SaaS project management platform, from Vista Equity Partners for $2.25 billion. Vista bought the company just two years ago.

Citrix, which is best known for its digital workspaces, sees this as a good match, especially at a time where employees have been forced to work from home because of the pandemic. By combining the two companies, it produces a powerful combination, one that didn’t escape Citrix CEO and president David Henshall

“Together, Citrix and Wrike will deliver the solutions needed to power a cloud-delivered digital workspace experience that enables teams to securely access the resources and tools they need to collaborate and get work done in the most efficient and effective way possible across any channel, device or location,” Henshall said in a statement.

Andrew Filev, founder and CEO at Wrike, who has managed the company through these multiple changes and remains at the helm, believes his company has landed in a good spot with the Citrix purchase.

“First, as part of the Citrix family we will be able to scale our product and accelerate our roadmap to deliver capabilities that will help our customers get more from their Wrike investment. We have always listened to our customers and have built our product based on their feedback — now we will be able to do more of that, faster.,” Filev wrote in a company blog post announcing the deal, stating a typical argument from CEOs of acquired companies.

The startup reports $140 million ARR, growing at 30% annually, so that comes out to approximately 16x its present-day revenue, which is the price companies are generally paying for acquisitions these days. However, as Wrike expects to reach $180 million to $190 million in ARR this year, the company’s sale price could look like a bargain in a few years’ time if the projections come to pass.

The price was not revealed in the 2018 sale, but it surely feels like a big win for Vista. Consider that Wrike has previously raised just $26 million.

#citrix, #cloud, #enterprise, #fundings-exits, #ma, #mergers-and-acquisitions, #private-equity, #project-management, #saas, #tc, #vista-equity-partners, #wrike

0

Vista acquires IT education platform Pluralsight for $3.5B

The hectic M&A cycle we have seen throughout 2020 continued this weekend when Vista Equity Partners announced it was acquiring  Pluralsight for $3.5 billion.

That comes out to $20.26 per share. The company stock closed on Friday at $18.50 per share on a market cap of over $2.7 billion.

With Pluralsight, Vista gets an online training company that helps educate IT professionals including developers, operations, data and security with a suite of online courses. As the pandemic has taken hold, it has breathed new life into EdTech, but even before that, there was a market for upskilling IT Pros online.

This trend certainly didn’t escape Monti Saroya, co-head of the Vista Flagship Fund and senior managing director at Vista. “We have seen firsthand that the demand for skilled software engineers continues to outstrip supply, and we expect this trend to persist as we move into a hybrid online-offline world across all industries and interactions, with business leaders recognizing that technological innovation is critical to business success,” he said in a statement.

As is typical for acquired companies, Pluralsight CEO Aaron Skonnard sees this as a way to grow the company more quickly. “The global Vista ecosystem of leading enterprise software companies provides significant resources and institutional knowledge that will open doors and help fuel our growth. We’re thrilled that we will be able to leverage Vista’s expertise to further strengthen our market leading position,” Skonnard said in a statement.

In a 2017 interview with TechCrunch’s Sarah Buhr, Skonnard described the company as an enterprise SaaS learning platform. It goes beyond simply offering the courses by giving professionals in a given category such as developer or IT operations the ability to measure their skills and abilities agains other pros in that category. He saw this assessment capability as a big differentiator.

“Our platform is ultimately focused on closing the technology skills gap throughout the world,” Skonnard told Buhr.

Pluralsight, which was founded in 2004, raised over $190 million before going public in 2018. The company has 1700 employees and over 17,000 customers. The acquisition is subject to standard regular regulatory oversight, but is expected to close in the first half of next year. Once that happens, the company will go private once again.

#edtech, #education, #enterprise, #fundings-exits, #ma, #pluralsight, #private-equity, #tc, #vista-equity-partners

0

Vista acquires Gainsight for $1.1B, adding to its growing enterprise arsenal

Vista Equity Partners hasn’t been shy about scooping up enterprise companies over the years, and today it added to a growing portfolio with its purchase of Gainsight.  The company’s software helps clients with customer success, meaning it helps create a positive customer experience when they interact with your brand, making them more likely to come back and recommend you to others. Sources pegged the price tag at $1.1 billion.

As you might expect, both parties are putting a happy face on the deal, talking about how they can work together to grow Gainsight further. Certainly, other companies like Ping Identity seem to have benefited from joining forces with Vista. Being part of a well capitalized firm allowed them to make some strategic investments along the way to eventually going public last year.

Gainsight and Vista are certainly hoping for a similar outcome in this case. Monti Saroya, co-head of the Vista Flagship Fund and senior managing director at the firm sees a company with a lot of potential that could expand and grow with help from Vista’s consulting arm, which helps portfolio companies with different aspects of their business like sales, marketing and operations.

“We are excited to partner with the Gainsight team in its next phase of growth, helping the company to expand the category it has created and deliver even more solutions that drive retention and growth to businesses across the globe,” Saroya said in a statement.

Gainsight CEO Nick Mehta likes the idea of being part of Vista’s portfolio of enterprise companies, many of whom are using his company’s products.

“We’ve known Vista for years, since 24 of their portfolio companies use Gainsight. We’ve seen Gainsight clients like JAMF and Ping Identity partner with Vista and then go public. We believe we are just getting started with customer success, so we wanted the right partner for the long term and we’re excited to work with Vista on the next phase of our journey,” Mehta told TechCrunch.

Brent Leary, principle analyst at CRM Essentials, who covers the sales and marketing space says that it appears that Vista is piecing together a sales and marketing platform that it could flip or go public in a few years.

“It’s not only the power that’s in the platform, it’s also the money. And Vista seems to be piecing together an engagement platform based on the acquisitions of Gainsight, Pipedrive and even last year’s Acquia purchase. Vista isn’t afraid to spend big money, if they can make even bigger money in a couple years if they can make these pieces fit together,” Leary told me.

While Gainsight exits as a unicorn, the deal might not have been the outcome it was looking for. The company raised over $187 million, according to Pitchbook data, though its fundraising had slowed in recent years. Gainsight raised $50 million in April of 2017 at a post-money valuation of $515 million, again per Pitchbook. In July of 2018 it added $25 million to its coffers, and the final entry was a small debt investment raised in 2019.

It could be that the startup saw its growth slow down, leaving it somewhere between ready for new venture investment and profitability. That’s a gap that PE shops like Vista look for, write a check, shake up a company and hopefully exit at an elevated price.

Gainsight hired a new chief revenue officer last month, notably. Per Forbes, the company was on track to reach “about” $100 million ARR by the end of 2020, giving it a revenue multiple of around 11x in the deal. That’s under current market norms, which could imply that Gainsight had either lower gross margins than comparable companies, or as previously noted, that its growth had slowed.

A $1.1 billion exit is never something to bemoan — and every startup wants to become a unicorn — but Gainsight and Mehta are well known, and we were hoping for the details only an S-1 could deliver. Perhaps one day with Vista’s help that could happen.

#cloud, #customer-experience, #customer-success, #enterprise, #exit, #fundings-exits, #gainsight, #ma, #marketing, #private-equity, #saas, #startups, #tc, #vista-equity-partners

0

LA-based Boulevard raises $27 million for its spa management software

Boulevard, a spa management and payment platform, has raised $27 million in a new round of funding despite a business slowdown caused by the COVID0-19 pandemic.

Founded four years ago by Matt Danna and Sean Stavropoulos, Boulevard was inspired by Stavropoulos’ inability to book a haircut and Danna’s hunch that the inability of salons and spas to cater to customers like the busy programmer could be indicative of a bigger problem.

The two spent months pounding the pavement in Los Angeles pretending to be college students doing research on the industry. They spoke with salon owners in Beverly Hills, Hollywood, and other trendy neighborhoods trying to get a sense of where software and services were falling short.

Through those months of interviews the two developed the booking management and payment platform that would become Boulevard. The inspiration was one part Shopify and one part ServiceTitan, Danna said.

The idea was that the Boulevard could build a pretty large business catering to the needs of a niche industry that hadn’t traditionally been exposed to a purpose-built toolkit for its vertical.

Investors including Index Ventures, Toba Capital, VMG Partners, Bonfire Ventures, Ludlow Ventures and BoxGroup agreed.

That could be because of the size of the industry. There’s over $250 billion spent per year across roughly 3 million businesses in the salon and spa category, according to data provided by the company. By comparison, fitness attracts roughly $34 billion in annual spending from 150,000 businesses.

“With limited access to the professionals that help us look and feel our best, I think the world has realized something that our team has always recognized: salons and spas are more than a luxury, they are essential to our well-being,” said Danna, in a statement. “We are humbled that so many businesses are placing their trust in us during such a turbulent time. This new capital will help accelerate our mission and deliver value to salons and spas that they never imagined was possible from technology.”

According to data provided by the company, Boulevard is definitely giving businesses a boost. On average, businesses increase bookings by 16%, retail revenue jumps by 18%, and gratuity paid out to stylists jumps by 24% for businesses that use Boulevard, the company said. It also reduces no-shows and cancellations, and halves time spent on the phone.  

“Boulevard is revitalizing the salon and spa industry, as evidenced by the company’s sustained 300-400% revenue growth over the last three years,” said Damir Becirovic of Index Ventures, whose firm led the company’s Series A round and has doubled down with the new capital infusion. 

Customers using the company’s software include: Chris McMillan the Salon, Heyday, MèCHE Salon, Paintbox, Sassoon Salon, SEV Laser, Spoke & Weal, and TONI&GUY.

Boulevard now has 90 employees and will look to increase that number as it continues to expand across the country.

Investors have taken a run at the spa market in the past, with company’s like MindBody valued at over $1 billion for its software services. Indeed, that company was taken private two years ago in a $1.9 billion transaction by Vista Equity Partners.

As Boulevard expands, the company may look to get deeper into financial services for the salons and spas that it’s already working with. Given the company’s window into these businesses’ financing, it’s not impossible to image a new line of business providing small business loans to these companies.

It’s something that the founders would likely not rule out. And it’s a way to provide more tools to entrepreneurs that often fall outside of the traditional sweet spot for banks and other lenders, Danna said.

 

#articles, #bonfire-ventures, #boulevard, #boxgroup, #business, #business-software, #economy, #financial-services, #laser, #los-angeles, #ludlow-ventures, #mindbody, #shopify, #small-business, #tc, #toba-capital, #vista-equity-partners

0

Menlo Security announces $100M Series E on $800M valuation

Menlo Security, a malware and phishing prevention startup, announced a $100 million Series E today on an $800 million valuation. The round was led by Vista Equity Partners with help from Neuberger Berman, General Catalyst, JP Morgan and other unnamed existing investors. The company has now raised approximately $250 million.

CEO and co-founder Amir Ben-Efraim says that while the platform has expanded over the years, the company stays mostly focused on web and email as major attack vectors for customers. “We really focused on a better kind of security outcome relative to the major threat factors of web and email. So web and email is really how most of the world or the enterprise world at least does its work, and these channels remain forever vulnerable to the latest attack,” Ben-Efraim explained.

He says that to protect those attack surfaces, the company pioneered a technology called web isolation to disconnect the user from the content and send only safe visuals. “When they click a link or engage with a website, the safe visuals are guaranteed to be malware-free, no matter where you go or you end up,” Ben-Efraim said.

With a valuation of $800 million, he’s proud having built his company from the ground up to this point. He’s not quite ready to discuss an IPO yet, but he expects to take this large influx of cash and continue to grow an independent company with an IPO perhaps three years out.

With an increase in business and the new capital, the company, which has 270 employees of which around 70 came on board this year, hopes to continue to grow at that pace in 2021. He says that as that happens the security startup has been paying close attention to the social justice movements.

“As a management team and for myself as a CEO, it’s an important topic. So we were paying close attention to our own diversification goals. We want Menlo to become a more diversified company,” Ben-Efraim said. He believes the way to get there is to prioritize recruiting channels where they can tap into a wider variety of potential recruits for the company.

While he wouldn’t discuss revenue, he did say in spite of the pandemic, the business is growing rapidly and sales are up 155% in terms of net new sales over last year. “The momentum for that being customers specifically in critical infrastructure, financial services, government and the like are seeing an uptick in attacks associated with COVID, and are looking at security as essential in an area that they need to double down on. So despite the financial difficulties, that’s created a bit of a tailwind for us strangely in 2020, even though the world economy as a whole is clearly being challenged by this epidemic,” he said.

#cloud, #enterprise, #funding, #malware, #menlo-security, #phishing, #recent-funding, #security, #startups, #tc, #vista-equity-partners

0

Datto trades modestly higher after pricing IPO at top of range

After pricing at $27 per share, Datto’s stock rose during regular trading. By mid-afternoon the data and security software company was worth $28.10, up a hair over 4%.

The company’s IPO comes on the back of a rapid-fire Q3 in which a host of technology companies, particularly software, made it to the public markets. While the number of un-exited unicorns in the United States still rose in the quarter, Q3 brought with it a wave of liquidity that felt long coming.

Datto’s IPO is one among what appears set to be a smaller Q4 class, though offerings like Airbnb and Affirm are still tipped to be coming in short order. Airbnb and Affirm each announced that they have filed privately to float, though have yet to publicly drop their S-1 filings.

The Datto IPO was interesting for a few reasons, including its mix of slower growth and rising profitability, its place in the midst of the current Vista drama, and how well it was priced.

While 2020 has brought with it many venture-backed IPOs, the year has also brought a nearly commensurate number of complaints about the IPO process itself. After many tech, and tech-ish, companies saw their values skyrocket after pricing and listing, vocal tech and venture figures argued that IPOs were effectively handing upside from companies to underwriting banks, and their customers.

There was some merit to the arguments. Datto, however, will not stoke similar fires. Up a mere few points from its IPO price, it was priced pretty much perfectly from the perspective of raising as much money as it could for itself in its debut.

Datto will use its IPO proceeds to pay down debts that it accrued during its takeover from Vista (private equity: a good deal for private equity). However, Datto’s CEO Tim Weller told TechCrunch in a call that the company will still be well-capitalized after the public offering, saying that it will have a very strong cash position.

The company should have places to deploy its remaining cash. In its S-1 filings, Datto highlighted a COVID-19 tailwind stemming from companies accelerating their digital transformation efforts. TechCrunch asked the company’s CEO whether there was an international component to that story, and whether digital transformation efforts are accelerating globally and not merely domestically. In a good omen for startups not based in the United States, the executive said that they were.

The company did not entertain a SPAC-led public debut, with Datto’s founder, Austin McChord, saying that his company had long planned a traditional public offering. Closing on the Vista front, McChord said that the removal of Vista’s Brian Sheth was immaterial to Datto’s IPO process.

#datto, #tc, #vista-equity-partners

0

Private equity firms can offer enterprise startups a viable exit option

Four years ago, Ping Identity was at a crossroads. A venerable player in the single sign-on market, its product was not a market leader, and after 14 years and $128 million in venture capital, it needed to find a new path.

While the company had once discussed an IPO, by 2016 it began putting out feelers for buyers. Vista Equity Partners made a $600 million offer and promised to keep building the company, something that corporate buyers wouldn’t guarantee. Ping CEO and co-founder Andre Durand accepted Vista’s offer, seeing it as a way to pay off his investors and employees and exit the right way. Even better, his company wasn’t subsumed into a large entity as likely would have happened with a typical M&A transaction.

As it turned out, the IPO-or-acquisition question wasn’t an either/or proposition. Vista continued to invest in the company, using small acquisitions like UnboundID and Elastic Beam to fill in its roadmap, and Ping went public last year. The company’s experience shows that private equity offers a reasonable way for mature enterprise startups with decent but not exceptional growth — like the 100% or more venture firms tend to favor — to exit, pay off investors, reward employees and still keep building the company.

But not everyone that goes this route has a tidy outcome like Ping’s. Some companies get brought into the P/E universe where they replace the executive team, endure big layoffs or sell off profitable pieces and stop investing in the product. But the three private equity firms we spoke to — Vista Equity, Thoma Bravo and Scaleworks — all wanted to see their acquisitions succeed, even if they each go about it differently.

Viable companies with good numbers

#enterprise, #ping-identity, #scaleworks, #tc, #thoma-bravo, #vista-equity-partners

0

Datto sets initial IPO price range, indicating a valuation of around $4B

It was just a few weeks ago that Datto, what TechCrunch called a “backup and disaster recovery firm,” filed to go public. This week the firm set an initial range for its debut.

The Vista Equity Partners -backed company was picked up by the private equity firm back in 2017. Vista is back in the news lately for several reasons, some stemming from executive shenanigans — read: tax evasion and huge penalties — but at least what’s coming from Datto’s camp is good tidings.

How so? Vista bought Datto for around $1.5 billion, and is set to make billions on its exit, based on the company’s expected IPO pricing.

Per the data firm’s latest S-1 filing, Datto is targeting a $24 to $27 per share price range. Here’s the math:

  • Total shares outstanding after IPO, sans underwriters’ allotment: 157,548,740 shares
  • Total shares outstanding after IPO, with underwriters’ allotment: 160,848,740
  • Max valuation at current prices, sans underwriters’ allotment: $4.25 billion
  • Max valuation at current prices, with underwriters’ allotment: $4.34 billion

Those two final numbers are dramatically bigger than the $1.5 billion that Vista is said to have paid for Datto.

How has Datto managed to generate so much value in the last few years? In financial terms, the company grew to a run rate of around $500 million, based on its Q1 and Q2 2020 revenue results. That gives the company a revenue multiple of less than 10x at its current IPO price maximum.

And that price makes sense. Datto is not growing very quickly, just 16% from H1 2019 to H1 2020, for example. The company did recently become profitable, however, which helps its valuation case. But more importantly, between 2017 and 2020 we have seen revenue multiples for software companies expand. That, plus Datto’s growth since 2017, have repriced it far above its sale price.

For Vista, it’s good news. Provided that they don’t get into tax issues over this particular set of returns. More on Datto as it prices and debuts.

#datto, #fundings-exits, #startups, #tc, #vista-equity-partners

0

U.S. Brings ‘Largest Ever Tax Charge’ Against Tech Executive

Federal prosecutors said Robert T. Brockman had used a web of entities based in Bermuda and Nevis, as well as secret bank accounts in Bermuda and Switzerland, to hide $2 billion in income from the I.R.S.

#brockman-robert-t, #federal-taxes-us, #internal-revenue-service, #smith-robert-f-1962, #tax-evasion, #tax-shelters, #vista-equity-partners

0

Vista-owned backup and recovery company Datto files to go public

When Vista Equity Partners acquired backup and disaster recovery firm Datto in 2017, it was easy to think that was the end of the company’s story. It would be comfortably absorbed into the private equity portfolio continuing to make money for the firm, but that’s not really the way Vista works. It tends to build up its companies, sometimes eventually taking them public, and yesterday that’s what happened when Datto filed its S-1.

Datto has been busy since it was acquired and reports a healthy $507 million in annual recurring revenue (ARR) along with 17,000 managed service provider (MSP) customers. Among those, it has more than 1000 customers contributing over $100,000 in ARR. MSPs are service providers that act as a company’s IT department when they don’t have internal resources.

The company has included a standard $100M placeholder for the amount they intend to raise for the event, and that will almost certainly change. In a nod to its manage service provider customer base, the company’s ticker symbol will be MSP.

When the company raised its $75 million Series B in 2015, CEO and founder Austin McChord, who is still leading the company today, said that the company was already profitable at that point, two years before Vista came knocking. “As a profitable company, Datto isn’t raising capital to fund operations, but instead, to enter new markets and build new products and technology,” he said in a statement at the time.

You can see that in the company’s financials. In the first six months of 2020, the company had subscription revenues of $234 million and a gross profit of $178 million. When sales and marketing and other costs are added in, the company had a net income of $10 million. That’s compared to $196 million in subscription revenue in the same period of 2019, a gross profit of $143 million, and a net loss of about $26 million.

In short, the company has managed to grow topline revenue, keep its cost of revenues flat, and manage the growth of its other expenses to limit their effect on the bottom line. That swung its net income per share from -$0.19 to $0.07.

Of course, companies like Datto always try to make the numbers look good in preparation for a public offering, so the real understanding will come in the next few quarters as we see if Datto can sustain its growth and keep expenses in check.

When I spoke to Alan Cline, senior managing director at Vista last year, he said his firm tends to like high performing startups like Datto that have built substantial companies.

“Software is the easiest place to innovate inside of technology. We see a huge advantage in terms of the productivity that it drives for the end business customer, and to us that high ROI is powerful because whether it’s up market or a down market, if I can prove to you you’re going to make more money or save money in your own operations by using my software, you can find the budget,” Cline told TechCrunch.

Just last year another company in the Vista portfolio, Ping Identity, filed to go public for the same $100 million placeholder, eventually offering 12.5 million shares at $15 per share. Today the company is trading at $31.68 per share with a market cap of over $2.5 billion.

#backup, #cloud, #datto, #disaster-recovery, #exit, #fundings-exits, #ipos, #managed-service-providers, #s-1, #startups, #tc, #vista-equity-partners

0

New Acquia platform looks to bring together developers, marketers and data

Acquia, the commercial company built on top of the open source Drupal content management system has pushed to be more than a publishing platform in recent years, using several strategic acquisitions to move into managing customer experience, and today the company announced a new approach to developing and marketing on the Drupal Cloud.

This involves bringing together developers and marketers under the umbrella of the new Acquia Open DXP platform. This approach has two main components: “What we’ve been working on is deep integration across our suite and pulling together our new foundational Drupal Cloud offering, and our new foundational Marketing Cloud offering,” Kevin Cochrane, senior vice president of product marketing at Acquia said.

The offerings bring together a set of acquisitions the company made over the last year including Mautic for marketing automation in May 2019, Cohesion for low-code developing in September and AgileOne in December for a customer data platform (CDP).

Cochrane says that the company is leveraging these acquisitions along with tools they developed internally and the upcoming release of Drupal 9 to offer a platform approach for customers where they can build content on the Drupal Cloud side and leverage customer data on the Marketing Cloud side.

On the Drupal Cloud, the company is offering a set of tools that includes an integrated development environment (IDE) where developers can build services, while marketers get a low code offering, where they can drag and drop content and design components from a library of offerings that could come from internal sources or the open source community. It also includes other components like security and content management.

The Marketing Cloud is the data layer where companies collect and manage data about customers with the goal of offering a more personalized and meaningful experience in a digital context.

Marketing automation tooling has shifted in recent years with the goal of providing customers with a unique and meaningful experience using the vast amount of data available to build a more complete picture of the customer and give them what they need, when they need it in a digital context. This has involved building a digital experience platform (DXP) and a customer data platform (CDP).

By pulling together these different elements, Acquia is attempting to put itself in a position to compete directly with big players in this space like Adobe and Salesforce offering a similar unified approach.

Vista Equity Partners bought Acquia last September for $1 billion. At the time, company founder Dries Buytaert said one of the advantages of being part of Vista was to get the resources to compete with larger companies in this space, and today’s announcement could be seen in that light.

#acquia, #cloud, #customer-data-platforms, #customer-experience-management, #developer, #digital-experience-platforms, #drupal, #enterprise, #marketing, #open-source, #tc, #vista-equity-partners

0

Apple device management company Jamf files S-1 as it prepares to go public

Jamf, the Apple device management company, filed to go public today. Jamf might not be a household name, but the Minnesota company has been around since 2002 helping companies manage their Apple equipment.

In the early days, that was Apple computers. Later it expanded to also manage iPhones and iPads. The company launched at a time when most IT pros had few choices for managing Macs in a business setting.

Jamf changed that, and as Macs and other Apple devices grew in popularity inside organizations in the 2010s, the company’s offerings grew in demand. Notably, over the years Apple has helped Jamf and its rivals considerably, by building more sophisticated tooling at the operating system level to help manage Macs and other Apple devices inside organizations.

Jamf raised approximately $50 million of disclosed funding before being acquired by Vista Equity Partners in 2017 for $733.8 million, according to the S-1 filing. Today, the company kicks off the high-profile portion of its journey towards going public.

Apple device management takes center stage

In a case of interesting timing, Jamf is filing to go public less than a week after Apple bought mobile device management startup Fleetsmith. At the time, Apple indicated that it would continue to partner with Jamf as before, but with its own growing set of internal tooling, which could at some point begin to compete more rigorously with the market leader.

Other companies in the space managing Apple devices besides Jamf and Fleetsmith include Addigy and Kandji. Other more general offerings in the mobile device management (MDM) space include MobileIron and VMware Airwatch among others.

Vista is a private equity shop with a specific thesis around buying out SaaS and other enterprise companies, growing them, and then exiting them onto the public markets or getting them acquired by strategic buyers. Examples include Ping Identity, which the firm bought in 2016 before taking it public last year, and Marketo, which Vista bought in 2016 for $1.8 billion and sold to Adobe last year for $4.8 billion, turning a tidy profit.

Inside the machine

Now that we know where Jamf sits in the market, let’s talk about it from a purely financial perspective.

Jamf is a modern software company, meaning that it sells its digital services on a recurring basis. In the first quarter of 2020, for example, about 83% of its revenue came from subscription software. The rest was generated by services and software licenses.

Now that we know what type of company Jamf is, let’s explore its growth, profitability and cash generation. Once we understand those facets of its results, we’ll be able to understand what it might be worth and if its IPO appears to be on solid footing.

We’ll start with growth. In 2018 Jamf recorded $146.6 million in revenue, which grew to $204.0 million in 2019. That works out to an annual growth rate of 39.2%, a more than reasonable pace of growth for a company going public. It’s not super quick, mind, but it’s not slow either. More recently, the company grew 36.9% from $44.1 million in Q1 2019 to $60.4 million in revenue in Q1 2020. That’s a bit slower, but not too much slower.

Turning to profitability, we need to start with the company’s gross margins. Then we’ll talk about its net margins. And, finally, adjusted profits.

Gross margins help us understand how valuable a company’s revenue is. The higher the gross margins, the better. SaaS companies like Jamf tend to have gross margins of 70% or above. In Jamf’s own case, it posted gross margins of 75.1% in Q1 2020, and 72.5% in 2019. Jamf’s gross margins sit comfortably in the realm of SaaS results, and perhaps even more importantly are improving over time.

Getting behind the curtain

When all its expenses are accounted for, the picture is less rosy, and Jamf is unprofitable. The company’s net losses for 2018 and 2019 were similar, totalling $36.3 million and $32.6 million, respectively. Jamf’s net loss improved a little in Q1, falling from $9.0 million in 2019 to $8.3 million this year.

The company remains weighed down by debt, however, which cost it nearly $5 million in Q1 2020, and $21.4 million for all of 2019. According to the S-1, Jamf is sporting a debt-to-equity ratio of roughly 0.8, which may be a bit higher than your average public SaaS company, and is almost certainly a function of the company’s buyout by a private equity firm.

But the company’s adjusted profit metrics strip out debt costs, and under the heavily massaged adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) metric, Jamf’s history is only one of rising profitability. From $6.6 million in 2018 to $20.8 million in 2019, and from $4.3 million in Q1 2019 to $5.6 million in Q1 2020. with close to 10% adjusted operating profit margins through YE 2019.

It will be interesting to see how the company’s margins will be affected by COVID, with financials during the period still left blank in this initial version of the S-1. The Enterprise market in general has been reasonably resilient to the recent economic shock, and device management may actually perform above expectations given the growing push for remote work.

Completing the picture

Something notable about Jamf is that it has positive cash generation, even if in Q1 it tends to consume cash that is made up for in other quarters. In 2019, the firm posted $11.2 million in operational cash flow. That’s a good result, and better than 2018’s $9.4 million of operating cash generation. (The company’s investing cash flows have often run negative due to Jamf acquiring other companies, like ZuluDesk and Digita.)

With Jamf, we have a SaaS company that is growing reasonably well, has solid, improving margins, non-terrifying losses, growing adjusted profits, and what looks like a reasonable cash flow perspective. But Jamf is cash poor, with just $22.7 million in cash and equivalents as of the end of Q1 2020 — some months ago now. At that time, the firm also had debts of $201.6 million.

Given the company’s worth, that debt figure is not terrifying. But the company’s thin cash balance makes it a good IPO candidate; going public will raise a chunk of change for the company, giving it more operating latitude and also possibly a chance to lower its debt load. Indeed Jamf notes that it intends to use part of its IPO raise to “to repay outstanding borrowings under our term loan facility…” Paying back debt at IPO is common in private equity buyouts.

So what?

Jamf’s march to the public markets adds its name to a growing list of companies. The market is already preparing to ingest Lemonade and Accolade this week, and there are rumors of more SaaS companies in the wings, just waiting to go public.

There’s a reasonable chance that as COVID-19 continues to run roughshod over the United States, the public markets eventually lose some momentum. But that isn’t stopping companies like Jamf from rolling the dice and taking a chance going public.

#apple, #apple-device-management, #enterprise, #finance, #fundings-exits, #jamf, #mobile-device-management, #private-equity, #saas, #tc, #vista-equity-partners

0

KKR to invest $1.5 billion in India’s Reliance Jio Platforms

Mukesh Ambani’s Reliance Jio Platforms has agreed to sell 2.32% stake to U.S. equity firm KKR in what is the fifth major investment in the top Indian telecom firm in just as many weeks.

On Friday, KKR announced it will invest $1.5 billion in the Indian top telecom operator, a subsidiary of India’s most valued firm (Reliance Industries), joining fellow American investors Facebook, Silver Lake, Vista Equity Partners, and General Atlantic that have made similar bets on the Indian firm that has amassed over 388 million subscribers.

The investment from KKR, which has wrote checks to about 20 tech companies to date including ByteDance and GoJek, values the nearly four-year-old Reliance Jio Platforms at $65 billion. The announcement today further shows the growing appeal of Jio Platforms, which has raised $10.35 billion in the past month by selling about 17% of its stake to foreign investors that are looking for a slice of the world’s second-largest internet market.

Ambani, the chairman and managing director of Reliance Industries and who has poured more than $30 billion to build Jio Platforms, said the company was looking forward to leverage “KKR’s global platform, industry knowledge and operational expertise to further grow Jio.”

“Few companies have the potential to transform a country’s digital ecosystem in the way that Jio Platforms is doing in India, and potentially worldwide. Jio Platforms is a true homegrown next generation technology leader in India that is unmatched in its ability to deliver technology solutions and services to a country that is experiencing a digital revolution,” Henry Kravis, co-founder and co-chief executive of KKR, said in a statement.

“We are investing behind Jio Platforms’ impressive momentum, world-class innovation and strong leadership team, and we view this landmark investment as a strong indicator of KKR’s commitment to supporting leading technology companies in India and Asia Pacific,” he added.

More to follow…

#apps, #asia, #companies, #facebook, #funding, #general-atlantic, #india, #kkr, #mukesh-ambani, #reliance, #reliance-industries, #reliance-jio, #silver-lake, #united-states, #vista-equity-partners

0

General Atlantic to invest $870M in India’s Reliance Jio Platforms

Mukesh Ambani’s Jio Platforms has agreed to sell 1.34% stake to General Atlantic, the latest deal in a series of deals the top Indian telecom operator has secured in recent weeks.

On Sunday, General Atlantic said it would invest $869.8 million in the Indian firm, joining Facebook, Silver Lake, and Vista Equity Partners that have made sizeable bets on the three-and-a-half-year old Indian firm.

General Atlantic’s investment values Jio Platforms at $65 billion (equity valuation) — the same valuation implied by the Silver Lake and Vista deals and a 12.5% premium over Facebook’s deal, the Indian firm said.

Sunday’s announcement further illustrates the growing appeal of Jio Platforms, which has raised $8.85 billion in the last one month, to foreign investors looking for a slice in the fast-growing world’s second largest internet market.

General Atlantic, a high profile investor in consumer tech space, has invested in dozens of firms such as Airbnb, Alibaba, Ant Financial, Box, ByteDance, Facebook, India’s NoBroker, Slack, Snapchat, and Uber.

“General Atlantic shares our vision of a Digital Society for India and strongly believes in the transformative power of digitization in enriching the lives of 1.3 billion Indians. We are excited to leverage General Atlantic’sproven global expertise and strategic insights across 40 years of technology investing for the benefit of Jio,” said Mukesh Ambani, chairman of Jio Platforms-parent firm Reliance Industries, in a statement.

More to follow…

#asia, #facebook, #funding, #general-atlantic, #india, #mukesh-ambani, #silver-lake, #tc, #vista-equity-partners

0

Vista Partners founder calls for a fintech revolution to help pandemic-hit, minority-owned small businesses

The head of what is arguably private equity’s most successful technology investment firm — Vista Equity Partners — made a rare appearance on Meet The Press to discuss the steps that the country needs to take to help minority-owned businesses recover from the economic collapse caused by the COVID-19 epidemic.

Robert F. Smith is one of the worlds wealthiest private equity investors, a noted philanthropist, and the richest African American in the U.S.  Days after announcing a $1.5 billion investment into the Indian telecommunications technology developer Jio Platforms, Smith turned his attention to the U.S. and the growing economic crisis that’s devastating minority businesses and financial institutions even as the COVID-19 epidemic ravages the health of minority communities.

Calling the COVID-19 “a pandemic on top of a series of epidemics”, Smith said that the next round of stimulus needs to support the small businesses that still remain underserved by traditional financial institutions — and that new financial technology software and services can help.

“We need to continue to rally as Americans to come with real, lasting, scalable solutions to enable the communities that are getting hit first, hardest, and probably will take the longest to recover with solutions that will help these communities thrive again,” Smith told NBC’s Chuck Todd.

Smith called for an infusion of cash into community development financial institutions and for a new wave of technology tools to support transparency and facilitate operations among these urban rural communities that aren’t served by large banking institutions. 

In all, the first round of the Congressional stimulus package poured $6 trillion into the U.S. economy through authorizations for the Treasury to issue $4 trillion in credit and $2 billion in cash payouts to various industries. The average size of those initial loans was just under $240,000, according to a post-mortem assessment of the Payroll Protection Program written by Lendio chief executive Brock Blake for Forbes

Blake’s assessment of the shortcomings of the PPP echoes Smith’s own criticism of the program. “Many of these small communities — urban, rural — aren’t being banked by the large institutions,” Smith said. Instead they’re working with community development financial institutions that in many instances weren’t approved lenders under the Small Business Administration and so were not able to distribute PPP money and make loans to their customers.

“We have to take this opportunity to reinvest in our business infrastructure in these small to medium businesses. In our banking infrastructure so that we can actually emerge out of this even stronger,” Smith said. “We have to invest in technology and software so that these ‘capillary banking systems’ are more efficient and they have more access to capital so they can engage with these businesses that are underbanked.”

In many instances this would amount to the construction of an entirely new financial infrastructure to support the small businesses that were only just beginning to emerge in minority communities after the 2008 recession.

“We need to get this average loan size to $25,000 and $15,000,” said Smith. To do that, community banks and development finance institutions are going to need to be able to access new fintech solutions that accelerate their ability to assess the creditworthiness of their customers and think differently about how to allocate capital and make loans. 

In some ways, Smith is echoing the call that fintech executives have been making since the PPP stimulus first started making its way through the financial system and banks began issuing loans.

“We would be remiss if we didn’t take a significant portion of capital to reinvest in the infrastructure of delivering capital back into those businesses and frankly reinvest in those businesses and give them technology and capability so there’s more transparency and visibility so there’s an opportunity to grow [and] scale,” said Smith. “I don’t want to see us go back to the same position where we were so we have these banking deserts.”

The head of Vista Equity Partners has even tasked his own portfolio companies to come up with solutions. As Barron’s reported last week, Smith told the Vista Equity portfolio company Finastra to develop technology that could help small lenders process Paycheck Protection Program loans for small businesses in underserved communities.

“In the process, it became apparent how unbanked these most vulnerable communities are, and we felt it was imperative to help build out permanent infrastructure in those banks so that they can build long-term relationships with the U.S. Small Business Administration beyond PPP,” Smith told Barrons.

As of last week, 800 lenders had processed 75,000 loans using the software that London-based Finastra developed for U.S. small lenders. Those loans generated $2.2 million in processing fees for the fintech company, proving that there’s money to be made in the small ticket lending market. And even as Finastra is reaping the rewards of its push into small business lending services, Vista Equity and Smith are donating the same amount to local food banks, according to a spokeswoman for the private equity firm, Barron’s reported.

 

#bank, #banking, #economy, #finance, #financial-infrastructure, #financial-technology, #forbes, #head, #lendio, #london, #money, #tc, #u-s-small-business-administration, #united-states, #vista-equity-partners

0

Vista Equity Partners to invest $1.5B in Indian telecom giant Reliance Jio Platforms

Private equity firm Vista Equity Partners said on Friday it would invest $1.5 billion in Reliance Jio Platforms, days after Facebook and Silver Lake also made bets on the Indian telecom giant.

The planned announcement, which would give U.S.-headquartered software-focused buyout firm Vista Equity Partners a 2.32% stake in Reliance Jio Platforms, values it at an equity valuation of $65 billion and enterprise valuation of $68 billion, the Indian firm said.

Reliance Jio Platforms, which began its commercial operation in the second half of 2016, upended the local telecom market by offering bulk of 4G data and voice calls for six months to users at no charge. A subsidiary of Reliance Industries (India’s most valuable firm by market value), Jio Platforms has amassed 388 million subscribers since its launch to become the nation’s top telecom operator.

“We are thrilled to join Jio Platforms to deliver exponential growth in connectivity across India, providing modern consumer, small business and enterprise software to fuel the future of one of the world’s fastest growing digital economies,” said Robert F. Smith, Founder, Chairman and CEO of Vista, which has more than $57 billion in cumulative capital commitments, in a statement.

More to follow…

#asia, #funding, #reliance-jio, #vista-equity-partners

0

As COVID-19 pummels global economy, 8 new companies join the $100M ARR club

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

This morning we’re adding a number of companies to the $100 million ARR club, a collection of private companies that have reached material scale. Over time, this series has gone from noting that a few private companies have managed to grow to IPO-size to denoting a cohort of firms that are IPO candidates.

The tone of this entry is different than that of its predecessors due to the ongoing depression of the American economy. For example, one company on today’s list, BounceX, announced that it crossed $100 million ARR mark since our last entry in the series, only to cut staff in the wake of COVID-19 before we could induct it properly. We’re leaving it on the list today as, well, it did meet our criteria before everything changed.

This particular $100 million ARR club entry was delayed because each time I’d get close to working on it the world economy would become worse, driving a separate news cycle, or another company to include would crop up. But, enough, let’s add HeadSpin, UiPath, DigitalOcean, BounceX, Wrike, Aeris, Podium, and Lucid to the list today. (We’ve already begun a watch list for the second half of 2020, including PolicyGenius, Guild Education and Zeus Living.)

New members

As we’re adding more new firms to league than usual this morning, we’ll be brief. If you need to catch up, this entry has links back to all previous ARR club posts. As always, we’re casting a wide net, so some companies might be a hair under the mark but close enough to include. Let’s go!

Headspin: On track for $100M ARR in ‘early 2020′

#artificial-intelligence, #ceo, #computing, #digitalocean, #executive, #fundings-exits, #headspin, #lucidpress, #podium, #professional-services, #qualtrics, #startups, #tc, #techcrunch, #tripactions, #uipath, #utah, #venture-capital, #vista-equity-partners, #world-wide-web, #wrike

0