If you are considering becoming a 1M/1M premium member and would like to join our mailing list to receive ongoing information, please sign up here.

Subscribe to our Feed

2016 IPO Prospects: AppDynamics May Sustain Unicorn Valuation

Posted on Wednesday, Jan 6th 2016

According to a Gartner report published last year, the application performance monitoring (APM) market grew at a record pace of 15.8% in 2014 to $2.6 billion. Compuware is the market leader with $326.9 million revenues, followed by IBM at $222.6 million. Newer companies are also making their presence felt. The fastest growing vendor in the space was San Francisco-based AppDynamics which reported an impressive 246.5% growth to end last year with an estimated $79 million in revenues.

AppDynamics’s Offerings

CA alumnus Jyoti Bansal founded AppDynamics in 2008 to deliver application performance monitoring tools to cater to the growing demand for distributed architectures. The idea of AppDynamics was similar to that of Google. Like Google wanted to index every page on the Internet, Jyoti wanted to “watch every line of code” in the world.

He set up AppDynamics initially as Singularity Technologies with the vision of ‘application intelligence’ to empower software-defined businesses to embark on their journey of digital transformation and adopt a new agile, business transaction-focused approach to monitoring, managing and optimizing their applications.

Today, it offers a range of solutions that not only provide visibility into the application and code-level detail, but also offer solutions for problems based on learnings evolved from the application’s past performance. It is this intelligent learning that has helped AppDynamics deliver products that are able to adapt to growth in scale and demands of cloud-based deployment. AppDynamics’ customers are able to monitor, troubleshoot, diagnose, and scale production applications. Businesses are able to identify how application performance is impacting the business and how the problems of application performance can be fixed. For instance, the platform is able to recognize that a shopper abandoned an online shopping cart due to poor application performance, and then allows the business to offer the customer a coupon for a future purchase.

AppDynamics’s Financials

AppDynamics operates on a freemium model where it offers a basic pre-production license for free. These licenses grant developers access to basic diagnostics and alert tools and help them take care of simpler problems such as slow transactions. Paid for premium subscriptions are available at prices starting at $3,300 for a year and come with added features such as access to unlimited application performance management agents, data retention for years, unlimited data agents, network request dashboards, analytics and other tools.

AppDynamics does not disclose its detailed financials. Analysts estimate that their bookings have nearly doubled to $150 million in 2014. According to the Gartner report, revenues came in at $79 million in 2014.

It is venture funded so far with $365 million raised from investors including Altimeter Capital, General Atlantic, Battery Ventures, ClearBridge Investments, Sands Capital Ventures, Lightspeed Venture Partners, Greylock Partners, Kleiner Perkins Caufield & Byers, and Institutional Venture Partners. Its last round of funding was held in November 2015 when it raised $158 million from Altimeter Capital and General Atlantic at a valuation of $1.9 billion. Prior to this round, AppDynamics had raised $70 million at a valuation of over $1 billion. The latest round was suggested to be a “pre-IPO growth round”.

The APM market is still dominated by the legacy firms like IBM, CA and Compuware. But newer age companies like New Relic and AppDynamics have made their mark in the market. Unlike New Relicwhich focuses on the smaller organizations and startups, and has just begun to expand to larger organizations, AppDynamics works more with mid-sized companies. In December 2014, New Relic went public and has since delivered a successful IPO with its market valuation having risen from pre-IPO levels of $1 billion to $1.75 billion. Given AppDynamics’s strengths, it won’t be off-base if it expects to deliver a similar performance when it decides to go public.

This segment is a part in the series : 2016 IPO Prospects

. Airbnb Sees Skyrocketing Valuations
. Actifio Looks Ready
. AppDynamics May Sustain Unicorn Valuation
. Automattic Needs to Justify Valuation
. Avant Will Have to Wait and Watch
. BuzzFeed Feeds on Native Advertising
. Coupa Manages Expenses Expertly
. Datto Bootstrapped First, Raised Money Later
. Is Uber Ready to Ride the Stock Market?
. Overfunded Domo Looks Promising
. Houzz May Unveil The Curtains
. DocuSign Looks Ready to Sign Up
. Illumio Rides On Security Trend
. Appears Ready to List
. Okta Prepares to Reveal Public Identity
. Palantir Wants to Stay Private
. Nutanix Files for IPO
. Medallia Bootstrapped First, Raised Money Later
. Slack Prepares to Communicate with the Market
. Twilio Expected to go Public Soon
. Snapchat Needs to Up Monetization ASAP
. Zscaler Sets IPO as a Long-Term Goal
. Warby Parker Should Look Before Leaping
. MuleSoft is a Unicorn, but Detailed Financials Remain Unknown
. Apttus Bootstrapped First, Raised Money Later
. Fanatics Expanding Its Playing Field
. Pinterest Finally Sees Revenues, But are they Enough?
. Tanium Bootstrapped First, Raised Money Later
. ironSource Strengthening its Revenue Generating Capabilities
. Anaplan Getting Ready to Go Public
. SecureWorks is Ready to List
. IPO-Ready Cloudera Wants to Wait and Watch
. HelloFresh Puts its IPO Plans on Hold
. Is Stripe Lining up Next?
. Qualtrics Bootstrapped First, Raised Money Later
. Skyscanner Bootstraps First from Scotland, Raises Money Later from Sequoia
. SurveyMonkey Will Likely Wait
. The Honest Company Makes the Online to Offline Model Work
. NantHealth Testing the IPO Markets, Yet Again
. BigCommerce Prepares to List
. Bloom Energy Likely to Stay Private
. Avast Software Preparing for a Listing, Yet Again
. Gusto Expands Beyond Payroll Processing
. InMobi May Have Missed the Bus
. Glassdoor Gearing up to go Public
. Human Longevity Leverages Machine Learning and Analytics to Increase Lifespan
. Blue Apron Cooking up an IPO
. Optiv Grows Inorganically
. Uber Eyeing Self-Driving
. The Trade Desk Files to List
. Deliveroo Delivers its Way to the Bank
. Selfie App Meitu Files to List on HKSE
. Apptio Files Despite Reduced Valuation and Mounting Losses
. Snap Snaps out of Chat Business to Justify Valuation
. From Bootstrapping to IPO, BlackLine Shows the Way

Hacker News
() Comments

Featured Videos