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′
When HeadSpin announced a $60 million Series C in February that valued it at $1.16 billion, the company said that it was on track to reach $100 million ARR in “early 2020.” That caught our eye. TechCrunch last covered the company in 2018 when it raised a $20 million Series B at a $500 million valuation.
We wanted to know more about its new milestone, so TechCrunch corresponded with the application testing service. As of March 12, the company was “on track to pass [the $100 million ARR] milestone and [was] expecting to grow 100% year-over-year,” according to its CEO Manish Lachwani. The executive also stressed that his company has grown rapidly without burning too much capital, telling TechCrunch that his firm was “lucky to have raised capital from a position of strength,” and that it had not touched much of the capital it had raised in the last few years.
We presume that HeadSpin’s growth will slow this year, but as it has lots of cash and was on track for $100 million ARR just a month ago, welcome aboard, HeadSpin.
UiPath: Closed 2019 at $360 million ARR
UiPath wrote into TechCrunch in mid-Q1 with a sheaf of impressive performance metrics that put the robotic process automation company instantly on our list. As with all companies today, we don’t know what they will look like after another few months of the COVID-19-driven slowdown, but in the case of UiPath, we have a company big enough that it’s unlikely to dip under the nine-figure revenue mark.
Per the company itself, UiPath closed December 2019 with $360 million ARR, up more than 100% from its 2018 total of $172 million. Adding, the firm’s “dollar-based net expansion rate” was 170%, a figure that I can only call bonkers. Presumably UiPath grew a bit before the recession hit, but we don’t know how far it got before the slowdown began.
UiPath most recently raised $568 million at a valuation of a little over $7 billion in mid-2019. Not that the path has always been smooth for the company; it saw layoffs last October, for example.
DigitalOcean: $250 million ARR towards the end of 2019
DigitalOcean, provider of cloud infrastructure services for smaller companies, grew from $200 million ARR in 2018 to around $250 million in 2019, per our coverage of the firm’s recent debt raise. Earlier in 2020, DigitalOcean added $100 million in debt, telling TechCrunch at the time that it expected to reach $300 million ARR inside the first half of 2020.
Even more, DigitalOcean claimed a “mid-20s percentage growth rate, and the company claims that its EBITDA (an adjusted profit metric) are in the low 20s” at the time.
Of course, small businesses, DigitalOcean’s client base, are taking a beating. But, as with UIPath, the firm is big enough to keep size during the crisis. And that $100 million in debt it raised in February now looks prescient; capital before a crisis always costs less.
BounceX: $100 million ARR in February, 2020
BounceX announced that it crossed $100 million ARR in late February, detailing a planned rebrand at the same time. (Emails into TechCrunch after the news have cast that rebrand in an interesting light, but that’s a tale for another day.) What matters is that BounceX met the $100 million club metric before the world ended.
Then, it fell prey to COVID-19-driven economic disruptions as so many companies have, forcing it to cut staff in April. BounceX is not the only company to start the year with a bang and pivot quickly to layoffs. As we’ve written, TripActions did something similar, announcing a huge new debt facility to power a corporate travel product only to pivot to staff cuts quickly after.
Anyway, BounceX helps companies determine who is coming to their site, matching visitors with email addresses. It’s a marketing-technology play that is pretty neat.
Wrike: Reached $100 million ARR in July 2019
I’m torn about Wrike. The company crossed the $100 million revenue mark in July 2019, yes. But it previously sold itself to private equity mothership Vista Equity Partners (the “software tastes like chicken” team). So, yes, it’s not a public company and, yes, it’s big enough, but being part of a larger company somehow makes the situation feel different.
Wrike provides work management software for teams, with a focus on marketing and creative teams, as well as groups of folks providing professional services, per its website.
The company told TechCrunch that it reached $100 million in revenue in mid-2019, but as it’s a SaaS company, it meets our criteria. Vista Equity bought it for a reported price of around $800 million.
Aeris: Over $100 million in revenue
This is probably my favorite company on our list today. Aeris provides wireless connectivity to companies that need to link up lots of devices; think of a firm that sells CPAP machines that need to report data back to their providing company. Aeris can sell them the connection they need.
caught up with Aeris CEO Marc Jones about his company and how it got to such size and EBITDA profitability without raising traditional venture capital. Jones became the company’s executive chair in 2007, helping restart the company around 2008 with his own capital, rebuilding from zero revenue in early 2009. The company had been working on new tech before its revenue zeroed-out, but no one would invest. Now, according to Jones, 95% of the company is owned by him, people from “his wedding,” and employees. And the profitable, large company was growing at 35% for years until COVID-19. Again, we’ll see what happens next.
Podium: $100 million ARR around the end of 2019
TechCrunch recently covered Podium’s $125 million Series C, a round that valued the company at around $1.5 billion. The new capital will help the firm keep growing, and like some other firms on this list, having raised new cash right before an economic cliff is good fortune; better to have too much than too little when the economy is in trouble.
The firm had expected to reach $60 million ARR towards the end of 2018, and $100 million around the end of 2019, which it did. Precisely when, and how much it has grown since are each not clear. But Podium’s SMB-focused communication and customer software suite was doing well until the markets fell and unemployment spiked.
The firm also launched a payments service earlier this year.
Lucid: $100 million ARR, sometime recently
The most recent addition to this list, we covered Lucid’s round earlier today. Lucid, makers of Lucidchart and Lucidpress, told TechCrunch that it has crossed the $100 million ARR threshold. However, it was even more coy about when than Podium (perhaps the two firms have a rivalry of sorts, both being based in Utah and vying to become the next Qualtrics) about when the milestone happened. The other data point that we have is that it reached $50 million ARR at some point in 2018, so its growth rate could vary from pretty ok to pretty good; it’s hard to say.
We covered Lucid’s milestone in light of its new $52 million Series C. The company capped the round low as it didn’t need too much more cash. Now entering whatever is ahead, I wonder if by the end it will wish it had raised more. Perhaps not, in which case its team will look all the smarter.
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Got all that? Good. Now we can put this series to bed for a bit, as I doubt that many companies are going to be delivering the sort of growth numbers needed to meet our criteria. Please feel free to prove me wrong.
