Another big enterprise deal to report as New Relic, an app performance monitoring service, has raised $80 million analyzing and is looking at an IPO.
Insight Venture Partners led the financing, which also included T. Rowe Price. Other participants included Dragoneer Investment Group LLC, Passport Ventures LLC, and the company’s existing investors Benchmark Capital, Trinity Ventures, Tenaya Capital, and Allen & Company.
Like a number of young enterprise companies, New Relic has had significant growth for its app performance technology. It has 35,000 active customers with 5,000 paying for the service. The company’s valuation is $750 million, said New Relic CEO Lew Cirne. He said the company is planning to do an IPO.
Cirne is one of the pioneers of performance monitoring. He sold his company, Wily Technology to CA in 2006 for $350 million. Soon after he started New Relic to offer real-time monitoring. In November, CA filed a lawsuit against New Relic, seeking “undisclosed damages” for lost profits. It is also seeking an injunction against New Relic prohibiting the infringement of CA patents and the misuse of the company’s intellectual property. Cirne said they learned of the lawsuit one hour before CA released a press announcement. He says he is confident New Relic will prevail in the lawsuit.
New Relic will use the funds to bolster development of a real-time monitoring service for mobile apps. It also plans to harness the data it continually monitors which is in excess of 85 billion metrics a day. The company will also add support in Europe and increase the size of the engineering team by 80%.
New Relic competes to some extent with AppDynamics, though the market opportunity is locked in the catacombs of enterprise software companies that have traditionally served the market.
App performance fits square in the middle of the cloud computing market where a new infrastructure is developing and with it the need for companies to monitor everything from their apps to their server clusters.