Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today we’re adding five names to the $100 million annual recurring revenue (ARR) club and listing all preceding members in a single post. This series, which was a bit of an accident, if I’m being honest, has included more than a dozen companies that have reached $100 million ARR, along with a handful more that are close.
Today we’re adding Seismic, ThoughtSpot, Noom, Riskified and Movable Ink to the list. As always, we have funding histories, growth metrics and interviews below on the new group. But at this juncture, as we head toward the two-dozen company mark, it’s a good time to ask, what is this list that we’re compiling?
At first, the goal of the jokingly-named “$100 million ARR club” was to highlight companies that were of real scale, an idea designed to gently push back against the “unicorn” moniker. As more and more unicorns were born and the private-capital world became adept at getting startups of all maturity levels over the requisite $1 billion valuation threshold, the term began to feel too diluted to have much signaling value.
While, in contrast, $100 million in ARR felt much more “hard” to the valuation metric’s comparable squishiness. But, since that first post, more and more companies have written in, sharing hard metrics and the series has continued. Perhaps we’re really just compiling an IPO watchlist, a grouping of firms that will probably go (or should go) public in the next 18 months.
Let’s dig into our new additions. Then, we’ll list all our prior entrants with links to our preceding coverage in case you are playing catch up. With that, here’s the entire $100 million ARR club a list of companies that we think could go public inside the next six quarters.
New additions
For the third time this year, let’s add some new names to our list. We’ll proceed alphabetically and then recall all former entrants in order of our original reporting. Let’s go!
Movable Ink
Movable Ink is a company we’re including a little early. The New York-based software company originally sold tooling that lets marketers make email more personalized. It has since expanded to build what it calls a “visual experience platform,” still focused on creating personalized experiences for individual consumers.
The firm counts more than 300 employees and around $70 million ARR. Movable Ink has only raised a smattering of capital, a total that it claims is just $14.5 million (Crunchbase has notes on $12.3 million of that total). In an email to TechCrunch, the firm said that it has “an eye on the $100M mark.”
Movable Ink also stressed that it has focused on “capital efficiency” and avoiding a “growth at any cost” approach to building its business. Obviously Movable Ink is a bit small for our list, but as a new, low-burn entrant it’s a welcome — provisional — addition.
Noom
If Movable Ink is a bit small, Noom is nearly too big for our list. Fresh off nearly quadrupling its revenue in 2019, from $61 million to $237 million, the New York-based company has raised a little under $115 million according to Crunchbase, including capital from Sequoia and Samsung Ventures.
To get a handle on how the company managed to grow so quickly last year and precisely what its habit changing-focused service does, TechCrunch got Noom president and co-founder Artem Petakov on the phone. According to Petakov, Noom is a consumer service mainly delivered through a mobile app, bolstered by 1,600 full-time coaches who help power dashboards, “essentially tuning [user] programs in real time.” Petakov went on to say that Noom’s coaching staff help provide “the human touch to […] the behavior change journey.”
Noom wants to help people shake up their lives, lose weight or begin to eat better, weaving human interaction into software to help folks have a higher chance of achieving what they are after. Sure, it’s probably not as high-margin as the pure-software player Slack, but the company’s growth is astounding. A popular Noom service tier costs around $30 per month, according to Petakov, with users usually signing up for a four-month “pack.”
If we’re going to allow venture-backed insurance companies to count lower-margin premium revenues as ARR — and we are — Noom skates right into our group due to its scale, software-delivery and monthly, recurring payment model. Its $237 million 2019 revenue result isn’t a pure ARR figure, but today is not the time for radical SaaS purity.
Riskified
Riskified, a New York-based startup focused on preventing fraud in e-commerce, crossed the $100 million ARR mark in 2018, with the firm telling TechCrunch that it is “projected to grow by high double digits in 2019.” We’d love to hear the final numbers, of course, so if you have them, feel free to write in.
The company’s recent growth (Riskified claims a compound annual growth rate of 250% over the past half-decade) helped it raise a $165 million round in November 2019. The company has raised a known total of $228.7 million, making it a very interesting entry to our list. As the firm passed $100 million ARR before its recent round, it got there on very little capital — $63.7 million in known funds, to be precise.
According to Riskified, it now has more than 460 employees in its office in New York and Tel Aviv and has continued expanding to new countries, including China.
From a product perspective, Riskified appears well-positioned for the continued global e-commerce boom; its products also help e-commerce players raise conversion rates, meaning that the former startup can help online merchants drive revenue and reduce cost of revenue at the same time. The firm was last valued at over $1 billion.
Seismic
Seismic, a San Diego-based startup that works with sales-enablement technology, reached $100 million ARR just over a year ago, announcing the news on January 31, 2019. A month before, the company had closed $100 million from Lightspeed and T. Rowe Price, valuing it at $1 billion post-money.
I honestly didn’t know what sales enablement technology was when I dug into Seismic. Instead of pretending to grok it for the purposes of explaining it to you, I got Seismic’s CEO and co-founder Doug Winter on the phone to detail the space for the both of us:
Most big companies with large [a] sales force really struggle to ramp up and onboard sellers and make them effective. Sales enablement is really about attacking that problem from different angles.
What Seismic is doing is helping businesses with the content side of that [equation]. Every conversation that you have, each of those stories that you’re trying to tell, involves content: PowerPoint decks, Google Slides, a video, white paper, ROI — show[ing] the value of what they’re buying. So what we’re really focused on is the content part of the problem and making it incredibly easy for the sellers to have the right content to match and allow them to tell the right story at the right time.
That’s sensible enough. Seismic also bought Percolate (TechCrunch covered the deal here), adding what Winter described as help with “orchestrat[ing] the process of creating content.” Which, given our above quoted paragraphs, feels like a good fit.
Seismic’s Percolate deal became public last November, presumably adding ARR to Seismic’s already dated $100 million figure. We can therefore infer that the combined entity is of IPO-scale. In the same interview with TechCrunch, we discussed the company’s possible public offering. Winter started off by breaking down how he thinks about public offerings, calling IPOs fundraising events, a way to enforce “discipline and maturity in the business” and a liquidity event. The CEO also said that his firm had a goal last year “to be IPO ready by the end of the year, because we wanted to drive the discipline through the business to do all the things that we needed to do.”
Seismic, according to Winter, “could go public, but we’re not going to [soon] and this year, our goal is [to] operate as if we were a public company.” Alas, we want to see this S-1.
ThoughtSpot
Finally, amongst our new additions today, is ThoughtSpot, a BI platform based in Sunnyvale, Calif. The firm has raised a mountain of cash, some $543.7 million according to Crunchbase (a figure confirmed by the company).
That capital got the company over the $100 million “run-rate” according to its own accounting. Its goal is somewhat simple, working to provide business intelligence tooling that allows even the less-technical to chop up and analyze large data sets. The BI space is huge because every business generates data, meaning that the need for help in sifting the information and extracting knowledge from the accumulated piles is a growth industry.
ThoughtSpot doesn’t list any pricing details on its website, but it’s obviously aimed at large companies as it only lists enterprise and “Extended Enterprise” plans. That fact likely explains why the company has raised so much money, as building a sales team targeting large companies is both expensive and time-consuming.
ThoughtSpot has raised from Lightspeed, Khosla, General Catalyst, Geodesic Capital and Sapphire. Its most recent round, a $248 million Series E, valued it at just under $2 billion. Here’s another S-1 that we’re excited to see as soon as possible. SaaS revenue multiples are at record highs, making this the sort of company that we’d expect to list while the market is hot.
Preceding members
Our latest entrants in hand, let’s rewind the clock and remind ourselves of who else has reached the $100 million threshold or is coming very close. Moving backwards in time from today, we begin with our January 22 article:
The $100M ARR club welcomes four new members
Just a few weeks back we tacked four new companies onto the list, including MetroMile, the second venture-backed insurance startup to make the cut. We’ve written before about the nuance of insurance revenue in contrast to more traditional ARR, but our rough take is that the stuff mostly recurs, and even if it has lower margins, it’s close enough for our purposes. Here are the late-January additions, along with their ARR figures:
- MetroMile: $100 million ARR.
- Tricentis: Over $100 million ARR, 66% 2019 growth.
- Kaltura: $100 million ARR, EBITDA profitable.
- Diligent: $300 million ARR and EBITDA profits, but it previously went public and is currently dry-docked at a quasi-private equity company.
Three upcoming members
Between January 14 and 16, we added three up-and-coming, pre-members to the $100 million ARR club. Here they are:
- SiteMinder: $70 million ARR. SiteMinder is a company that we’d previously included as it had reached AU$100 million, even if it was a bit smaller in USD terms. However, the company raised more money so we covered it again. We’re listing it here today as it’s interesting enough to break out from the rest.
- Cloudinary: $60 million ARR. Bootstrapped and fascinating, Cloudinary is probably the smallest company we’ve highlighted to date, but it’s also one of the most interesting. It will get to $100 million ARR in under four quarters, we reckon.
- ExtraHop: $100 million this year, at some point, but we’re not entirely sure when. More when we have it.
Kicking off 2020 with 4 new members of the $100M a club
Right at the start of the year, we added four companies to the list, including Monday.com, which we’ve spoken to at length in the intervening weeks. At this point the grouping of companies was becoming a bit crowded, but that didn’t stop us.
Here is the January 2nd group:
- Sisense: Over $100 million ARR when we covered the firm, it has since added another $100 million in private capital, pushing its IPO pretty far into the future, we’d guess.
- SiteMinder: As noted above, SiteMinder reached AU$100 million ARR. Next step: $100 million ARR in American dollars.
- Monday.com: A huge Israeli startup, the company is worth nearly $2 billion and had crossed the $100 million ARR mark when we wrote about it. It has since announced that it reached $120 million ARR. And, we’ll have more from the company soon (hang tight!).
- Lemonade: Our first venture-backed insurance startup that made the list, Lemonade made us look into the space and learn all about loss ratios and ask what really is ARR anyways?
The newest members of the $100M ARR club
A few days after I got back to TechCrunch.com, we released our first set of follow-up companies. The first set of companies that we highlighted as generating $100 million or more in annual recurring revenue led to a number of emails and interviews, out of which we got the following set of entrants:
- GitLab: Expected to reach $100 million ARR in January, 2020.
- Egnyte: Passed $100 million ARR in November, 2019.
- Braze: Crossed the $100 million ARR mark, presumably in 2019.
- O’Reilly: Saw its “platform business” cross $100 million ARR in 2019.
The $100M ARR Club
And here we are, back at the beginning. Since this post came out, Asana filed privately to go public in a direct listing. That means that our list is already working in terms of flushing out upcoming IPOs. Exciting! Druva and WalkMe, get filing!
- Asana: Crossed the $100 million ARR mark in February, 2019.
- WalkMe: Reached $100 million ARR in Q2 2019.
- Druva: Hit $100 million in Q4 2019, at least according to the time of its announcement.
If past is anything like prelude, we’ll soon have another group of companies to add. But, at least for now, we have all the members in a single place. Go team.