Dropbox to acquire secure document sharing startup DocSend for $165M

Dropbox announced today that it plans to acquire DocSend for $165 million The company helps customers share and track documents by sending a secure link instead of an attachment.

“We’re announcing that we’re acquiring DocSend to help us deliver an even broader set of tools for remote work, and DocSend helps customers securely manage and share their business critical documents, backed by powerful engagement analytics,” Houston told me.

When combined with the electronic signature capability of HelloSign, which Dropbox acquired in 2019, the acquisition gives the company an end-to-end document sharing workflow it had been missing. “Dropbox, DocSend and HelloSign will be able to offer a full suite of self-serve products to help our millions of customers manage the entire critical document workflows and give more control over all aspects of that,” Houston explained.

Houston and DocSend co-founder and CEO Russ Heddleston have known each for other years, and have an established relationship. In fact, Heddleston worked for Dropbox as a summer in intern in 2010. He even ran the idea for the company by Houston prior to launching in 2013, who gave it his seal of approval, and the two companies have been partners for some time.

“We’ve just been following the thread of external sending, which has just kind of evolved and opened up into all these different workflows. And it’s just really interesting that by just being laser focused on that we’ve been able to create a really differentiated product that users love a ton,” Heddleston said.

Those workflows include creative, sales, client services or startups using DocSend to deliver proposals or pitch decks and track engagement. In fact, among the earliest use cases for the company was helping startups track engagement with their pitch decks at VC firms.

The company raised a modest amount of the money along the way, just $15.3 million, according to Crunchbase, but Heddleston says that he wanted to build a company that was self-sufficient and raising more VC dollars was never a priority or necessity. “We had [VCs] chase us to give us more money all the time, and what we would tell our employees is that we don’t keep count based on money raised or headcount. It’s just about building a great company,” he said.

That builder’s attitude was one of the things that attracted Houston to the company. “We’re big believers in the model of product growth and capital efficiency, and building really intuitive products that are viral, and that’s a lot of what what attracted us to DocSend,” Houston said. While DocSend has 17,000 customers, Houston says the acquisition gives the company the opportunity to get in front of a much larger customer base as part of Dropbox.

It’s worth noting that Box offers a similar secure document sharing capability enabling users to share a link instead of using an attachment. It recently bought e-signature startup SignRequest for $55 million with an eye toward building more complex document workflows similar to what Dropbox now has with HelloSign and DocSend. PandaDoc is another competitor in this space.

Both Dropbox and SendDoc participated in the TechCrunch Disrupt Battlefield with Houston debuting Dropbox in 2008 at the TechCrunch 50, the original name of the event. Meanwhile, DocSend participated in 2014 at TechCrunch Disrupt in New York City.

DocSend’s approximately 50 employees will be joining Dropbox when the deal closes, which should happen soon, subject to standard regulatory oversight.


By Ron Miller

Atlassian is acquiring Chartio to bring data visualization to the platform

The Atlassian platform is chock full of data about how a company operates and communicates. Atlassian launched a machine learning layer, which relies on data on the platform with the addition of Atlassian Smarts last fall. Today the company announced it was acquiring Chartio to add a new data analysis and visualization component to the Atlassian family of products. The companies did not share a purchase price.

The company plans to incorporate Chartio technology across the platform, starting with Jira. Before being acquired, Chartio has generated its share of data, reporting that 280,000 users have created 10.5 million charts for 540,000 dashboards pulled from over 100,000 data sources.

Atlassian sees Chartio as way to bring that data visualization component to the platform and really take advantage of the data locked inside its products. “Atlassian products are home to a treasure trove of data, and our goal is to unleash the power of this data so our customers can go beyond out-of-the-box reports and truly customize analytics to meet the needs of their organization,” Zoe Ghani, head of product experience at platform at Atlassian wrote in a blog post announcing the deal.

Chartio co-founder and CEO Dave Fowler wrote in a blog post on his company website that the two companies started discussing a deal late last year, which culminated in today’s announcement. As is often the case in these deals, he is arguing that his company will be better off as part of large organization like Atlassian with its vast resources than it would have been by remaining stand-alone.

“While we’ve been proudly independent for years, the opportunity to team up our technology with Atlassian’s platform and massive reach was incredibly compelling. Their product-led go to market, customer focus and educational marketing have always been aspirational for us,” Fowler wrote.

As for Chartio customers, unfortunately according to a notice on the company website, the product is going to be going away next year, but customers will have plenty of time to export the data to another tool. The notice includes a link to instructions on how to do this.

Chartio was founded in 2010, and participated in the Y Combinator Summer 2010 cohort. It raised a modest $8.03 million along the way, according to Pitchbook data.


By Ron Miller

DigitalOcean’s IPO filing shows a two-class cloud market

This morning DigitalOcean, a provider of cloud computing services to SMBs, filed to go public. The company intends to list on the New York Stock Exchange (NYSE) under the ticker symbol “DOCN.”

DigitalOcean’s offering comes amidst a hot streak for tech IPOs, and valuations that are stretched by historical norms. The cloud hosting company was joined by Coinbase in filing its numbers publicly today.

DigitalOcean’s offering comes amidst a hot streak for tech IPOs.

However, unlike the cryptocurrency exchange, DigitalOcean intends to raise capital through its offering. Its S-1 filing lists a $100 million placeholder number, a figure that will update when the company announces an IPO price range target.

This morning let’s explore the company’s financials briefly, and then ask ourselves what its results can tell us about the cloud market as a whole.

DigitalOcean’s financial results

TechCrunch has covered DigitalOcean with some frequency in recent years, including its early-2020 layoffs, its early-2020 $100 million debt raise and its $50 million investment from May of the same year that prior investors Access Industries and Andreessen Horowitz participated in.

From those pieces we knew that the company had reportedly reached $200 million in revenue during 2018, $250 million in 2019 and that DigitalOcean had expected to reach an annualized run rate of $300 million in 2020.

Those numbers held up well. Per its S-1 filing, DigitalOcean generated $203.1 million in 2018 revenue, $254.8 million in 2019 and $318.4 million in 2020. The company closed 2020 out with a self-calculated $357 million in annual run rate.

During its recent years of growth, DigitalOcean has managed to lose modestly increasing amounts of money, calculated using generally accepted accounting principles (GAAP), and non-GAAP profit (adjusted EBITDA) in rising quantities. Observe the rising disconnect:


By Alex Wilhelm

SailPoint is buying Saas management startup Intello

SailPoint, an identity management company that went public in 2017, announced it was going to be acquiring Intello today, an early stage SaaS management startup. The two companies did not share the purchase price.

SailPoint believes that by helping its customers locate all of the SaaS tools being used inside a company, it can help IT make the company safer. Part of the problem is that it’s so easy for employees to deploy SaaS tools without IT’s knowledge, and Intello gives them more visibility and control.

In fact, the term ‘shadow IT’ developed over the last decade to describe this ability to deploy software outside of the purview of IT pros. With a tool like Intello, they can now find all of the SaaS tools and point the employees to sanctioned ones, while shutting down services the security pros might not want folks using.

Grady Summers, EVP of product at SailPoint says that this problem has become even more pronounced during the pandemic as many companies have gone remote, making it even more challenging for IT to understand what SaaS tools employees might be using.

“This has led to a sharp rise in ungoverned SaaS sprawl and unprotected data that is being stored and shared within these apps. With little to no visibility into what shadow access exists within their organization, IT teams are further challenged to protect from the cyber risks that have increased over the past year,” Summers explained in a statement. He believes that with Intello in the fold, it will help root out that unsanctioned usage and make companies safer, while also helping them understand their SaaS spend better.

Intello has always seen itself as a way to increase security and compliance and has partnered in the past with other identity management tools like Okta and Onelogin. The company was founded in 2017 and raised $5.8 million according to Crunchbase data. That included a $2.5 million extended seed in May 2019.

Yesterday, another SaaS management tool, Torii, announced a $10 million Series A. Other players in the SaaS management space include BetterCloud and Blissfully, among others.


By Ron Miller

Logging startups are suddenly hot as CrowdStrike nabs Humio for $400M

A couple of weeks ago SentinelOne announced it was acquiring high-speed logging platform Scalyr for $155 million. Just this morning CrowdStrike struck next, announcing it was buying unlimited logging tool Humio for $400 million.

In Humio, CrowdStrike gets a company that will provide it with the ability to collect unlimited logging information. Most companies have to pick and choose what to log and how long to keep it, but with Humio, they don’t have to make these choices with customers processing multiple terabytes of data every single day.

Humio CEO Geeta Schmidt writing in a company blog post announcing the deal described her company in similar terms to Scalyr, a data lake for log information:

“Humio had become the data lake for these enterprises enabling searches for longer periods of time and from more data sources allowing them to understand their entire environment, prepare for the unknown, proactively prevent issues, recover quickly from incidents, and get to the root cause,” she wrote.

That means with Humio in the fold, CrowdStrike can use this massive amount of data to help deal with threats and attacks in real time as they are happening, rather than reacting to them and trying to figure out what happened later, a point by the way that SentinelOne also made when it purchased Scalyr.

“The combination of real-time analytics and smart filtering built into CrowdStrike’s proprietary Threat Graph and Humio’s blazing-fast log management and index-free data ingestion dramatically accelerates our [eXtended Detection and Response (XDR)] capabilities beyond anything the market has seen to date,” CrowdStrike CEO and co-founder George Kurtz said in a statement.

While two acquisitions don’t necessarily make a trend, it’s clear that security platform players are suddenly seeing the value of being able to process the large amounts of information found in logs, and they are willing to put up some cash to get that capability. It will be interesting to see if any other security companies react with a similar move in the coming months.

Humio was founded in 2016 and raised just over $31 million, according to Pitchbook Data. Its most recent funding round came in March 2020, a $20 million Series B led by Dell Technologies Capital. It would appear to be a decent exit for the startup.

CrowdStrike was founded in 2011 and raised over $480 million along the way before going public in 2019. The deal is expected to close in the first quarter, and is subject to typical regulatory oversight.


By Ron Miller

SentinelOne to acquire high-speed logging startup Scalyr for $155M

SentinelOne, a late-stage security startup that helps customers make sense of security data using AI and machine learning, announced today that it is acquiring Scalyr, the high-speed logging startup for $155 million in stock and cash.

SentinelOne sorts through oodles of data to help customers understand their security posture, and having a tool that enables engineers to iterate rapidly in the data, and get to the root of the problem is going to be extremely valuable for them, CEO and co-founder Tomer Weingarten explained. “We thought Scalyr would be just an amazing fit to our continued vision in how we secure data at scale for every enterprise [customer] out there,” he told me.

He said they spent a lot of time shopping for a company that could meet their unique scaling needs and when they came across Scalyr, they saw the potential pretty quickly with a company that has built a real-time data lake. “When we look at the scale of our technology, we obviously scoured the world to find the best data analytics technology out there. We [believe] we found something incredibly special when we found a platform that can ingest data, and make it accessible in real time,” Weingarten explained.

He believes the real time element is a game changer because it enables customers to prevent breaches, rather than just reacting to them. “If you’re thinking about mitigating attacks or reacting to attacks, if you can do that in real time and you can process data in real time, and find the anomalies in real time and then meet them, you’re turning into a system that can actually deflect the attacks and not just see them and react to them,” he explained.

The company sees Scalyr as a product they can integrate into the platform, but also one which will remain a stand-alone. That means existing customers should be able to continue using Scalyr as before, while benefiting from having a larger company contributing to its R&D.

While SentinelOne is not a public company, it is a pretty substantial private one, having raised over $695 million, according to Crunchbase data. The company’s most recent funding round came in February last year, a $200 million investment with a $1.1 billion valuation.

As for Scalyr it was launched in 2011 by Steve Newman, who first built a word processor called Writely and sold it to Google in 2006. It was actually the basis for what became Google Docs. Newman stuck around and started building the infrastructure to scale Google Docs, and he used that experience and knowledge to build Scalyr. The startup raised $27 million along the way, according to Crunchbase data including a $20 million Series A investment in 2017.

The deal will close this quarter, and when it does Scalyr’s 45 employees will be joining SentinalOne.


By Ron Miller

Rapid7 acquires Kubernetes security startup Alcide for $50M

Rapid7, the Boston-based security operations company, has been making moves into the cloud recently and this morning it announced that it has acquired Kubernetes security startup Alcide for $50 million.

As the world shifts to cloud native using Kubernetes to manage containerized workloads, it’s tricky ensuring that the containers are configured correctly to keep them safe. What’s more, Kubernetes is designed to automate the management of containers, taking humans out of the loop and making it even more imperative that the security protocols are applied in an automated fashion as well.

Brian Johnson, SVP of Cloud Security at Rapid7 says that this requires a specialized kind of security product and that’s why his company is buying Alcide. “Companies operating in the cloud need to be able to identify and respond to risk in real time, and looking at cloud infrastructure or containers independently simply doesn’t provide enough context to truly understand where you are vulnerable,” he explained.

“With the addition of Alcide, we can help organizations obtain comprehensive, unified visibility across their entire cloud infrastructure and cloud native applications so that they can continue to rapidly innovate while still remaining secure,” he added.

Today’s purchase builds on the company’s acquisition of DivvyCloud last April for $145 million. That’s almost $200 million for the two companies that allow the company to help protect cloud workloads in a fairy broad way.

It’s also part of an industry trend with a number of Kubernetes security startups coming off the board in the last year as bigger companies look to enhance their container security chops by buying the talent and technology. This includes VMWare nabbing Octarine last May, Cisco getting PortShift in October and RedHat buying StackRox last month.

Alcide was founded in 2016 in Tel Aviv, part of the active Israeli security startup scene. It raised about $12 million along the way, according to Crunchbase data.


By Ron Miller

Workday nabs employee feedback platform Peakon for $700M

Workday started the work day with some big news today. It’s acquiring employee feedback platform Peakon for $700 million in cash.

One thing we have learned during the pandemic is that organizations need to find new ways to build stronger connections with their employees, and that’s precisely what Peakon provides. “Bringing Peakon into the Workday family will be very compelling to our customers — especially following an extraordinary past year that has magnified the importance of having a constant pulse on employee sentiment in order to keep people engaged and productive,” Workday co-founder and co-CEO Aneel Bhusri, said in a statement.

Without the ability to have face-to-face meetings with employees, managers have struggled throughout 2020 to understand how COVID, working from home and all the trials and tribulations of the last year have affected the workforce.

But this ability to check the pulse of employees goes beyond this crisis period. Managers of large organizations know that the bigger and more spread out your firm becomes, the more challenging it is to understand what’s happening across the company. The company uses weekly surveys to ask specific questions about the organization. For them it’s all about getting good data, and so far customers have used the platform to ask over 153 million questions since inception six years ago.

Peakon CEO and co-founder Phil Chambers sees Workday as a logical partner. “Workday excels at helping enable customers to leverage their data. Together, we’ll be able to help drive greater productivity, talent development and employee retention for our customers — and unify how employees interact with their organizations,” he said in a Workday blog post announcing the deal.

Peakon was founded in Copenhagen in 2014 and has raised $68 million along the way, according to Crunchbase data. Its most recent round was a $35 million Series B in March 2019. The deal is expected to close by the end of this quarter subject to typical regulatory review.


By Ron Miller

SAP is buying Berlin business process automation startup Signavio

Rumors have been flying this week that SAP was going to buy Berlin business process automation startup Signavio, and sure enough the company made it official today. The companies did not reveal the purchase price, but Bloomberg reported earlier this week that the deal could be worth $1.2 billion.

With Signavio SAP gets a cloud native business process management tool. SAP CFO Luka Mucic sees a world where understanding and automating businesses processes has become a key part of a company’s digital transformation efforts.

“I cannot overstress the importance for companies to be able to design, benchmark, improve and transform business processes across the enterprise to support new capabilities and business models,” he said in a statement.

While traditional enterprise BPA tools have existed for years, having a cloud native tool gives SAP a much more modern approach to attacking this problem, and being able to automate business processes via the cloud has become more important during the pandemic when many many employees are working entirely from home.

SAP also sees Signavio as a key missing piece in the company’s Business Process Intelligence unit. “The combination of business process intelligence from SAP and Signavio creates a leading end-to-end business process transformation suite to help our customers achieve the requirements needed to gain a competitive edge,” he said.

SAP has been making moves into process automation of late. In fact at SAP TechEd in December, the company announced SAP Intelligent Robotic Process Automation, its foray into the RPA space. This should fit in nicely alongside it.

Dr. Gero Decker, Savigno co-founder and CEO, sees SAP resources helping push the company beyond what it could have done on its own. “Considering the positioning of SAP, its geographical coverage and financial muscle, SAP is the biggest and best platform to bring process intelligence to every organization,” he said in a statement.

The increased resources and reach argument is one that just about every acquired company CEO makes, but being pulled into a company the size of SAP can be a double-edged sword. Yes, it has vast resources, but it also can be hard for an acquired company to find its place in such a large pond. How well they fit in and make that transition from startup to big company cog, will go a long way in determining the success of this transaction in the long run.

Signavio launched in 2009 in Berlin and has raised almost $230 million, according to Crunchbase data. Investors include Apax Digital and Summit Partners. The most recent investment was July 2019 Series C for $177 million, which came in at a $400 million valuation.

Customers include Comcast, Bosch, Liberty Mutual, and yes SAP. Perhaps it will be getting a discount now.


By Ron Miller

Bloomreach raises $150M on $900M valuation and acquires Exponea

Bloomreach, an API company that helps eCommerce customers with search and web site creation, announced a $150 million investment today from Sixth Street Growth. Today’s funding values the company at $900 million.

At the same time, the company announced it has acquired Exponea, a startup that gives Bloomreach a marketing automation component it had been missing. The two companies did not reveal the acquisition price, but along with the pure functionality, the company gains 200 additional employees, which is significant, considering Bloomreach had 300 prior to the acquisition. It also gains 250 net new customers, giving it a total of 750.

“Historically, we have had two major pillars of the business — the search part of it and the content part,” Bloomreach CEO and co-Founder Raj De Datta told TechCrunch. The content management component lets customers build websites, while the search powers the search box, navigation and merchandising. He points out that all of it is powered by an underlying data analysis engine that matches data to people and people to products.

Exponea will give the company more of a complete platform of services, allowing marketers to target and personalize their marketing messages across multiple channels. De Datta says the two companies had similar missions and made a good fit. “We have a common vision and common sort of product direction. […] Both companies are data-driven optimization technologies[…] and both are entrepreneurial product-driven companies,” he said.

It also helped that they had been partnering together for six months prior to the sale, which has now closed. Exponea was founded in 2016 in Slovakia and has raised over $57 million, according to Pitchbook data. The plan is to leave Exponea as a stand-alone product, while finding ways to integrate it more smoothly with the other components in the Bloomreach platform. They expect the integration parts to happen over the next year.

While De Datta did not want to share specific revenue figures, he did say that the company had a record second half as business was pushed online due to the pandemic. Michael McGinn, partner at Sixth Street and co-head at investor Sixth Street Growth doesn’t see the demand for eCommerce abating, even post-COVID, and that will drive a need for more customized online shopping experiences.

“Technology serving more bespoke customer experiences is a rapidly expanding market and we are pleased to join Bloomreach in its leadership of the digital commerce experience and marketing sector,” McGinn said in a statement.

De Datta says the money was used in part to buy Exponea, but he also plans to invest more in engineering to continue building the product line. The ultimate goal is an IPO, but as you would expect, he wasn’t ready to commit to any timeline just yet.

“I wouldn’t say we have a timeline, but our goal is that the company over the course of 2021 should make investments towards that, so that it’s an option for us.”


By Ron Miller

F5 snags Volterra multi-cloud management startup for $500M

F5, the applications networking company announced today that it is acquiring Volterra, a multi-cloud management startup for $500 million. That breaks down to $440 million in cash and $60 million in deferred and unvested incentive compensation.

Volterra emerged in 2019 with a $50 million investment from multiple sources including Khosla Ventures and Mayfield along with strategic investors like M12 (Microsoft’s venture arm) and Samsung Ventures. As the company described it to me at the time of the funding:

Volterra has innovated a consistent, cloud-native environment that can be deployed across multiple public clouds and edge sites — a distributed cloud platform. Within this SaaS-based offering, Volterra integrates a broad range of services that have normally been siloed across many point products and network or cloud providers.

The solution is designed to provide a single way to view security, operations and management components.

F5 president and CEO François Locoh-Donou sees Volterra’s edge solution integrating across its product line. “With Volterra, we advance our Adaptive Applications vision with an Edge 2.0 platform that solves the complex multi-cloud reality enterprise customers confront. Our platform will create a SaaS solution that solves our customers’ biggest pain points,” he said in a statement.

Volterra founder and CEO Ankur Singla, writing in a company blog post announcing the deal, says the need for this solution only accelerated during 2020 when companies were shifting rapidly to the cloud due to the pandemic. “When we started Volterra, multi-cloud and edge were still buzzwords and venture funding was still searching for tangible use cases. Fast forward three years and COVID-19 has dramatically changed the landscape — it has accelerated digitization of physical experiences and moved more of our day-to-day activities online. This is causing massive spikes in global Internet traffic while creating new attack vectors that impact the security and availability of our increasing set of daily apps,” he wrote.

He sees Volterra’s capabilities fitting in well with the F5 family of products to help solve these issues. While F5 had a quiet 2020 on the M&A front, today’s purchase comes on top of a couple of major acquisitions in 2019 including Shape Security for $1 billion and NGINX for $670 million.

The deal has been approved by both companies boards, and is expected to close before the end of March subject to regulatory approvals.


By Ron Miller

RedHat is acquiring container security company StackRox

RedHat today announced that it’s acquiring container security startup StackRox . The companies did not share the purchase price.

RedHat, which is perhaps best known for its enterprise Linux products has been making the shift to the cloud in recent years. IBM purchased the company in 2018 for a hefty $34 billion and has been leveraging that acquisition as part of a shift to a hybrid cloud strategy under CEO Arvind Krishna.

The acquisition fits nicely with RedHat OpenShift, its container platform, but the company says it will continue to support StackRox usage on other platforms including AWS, Azure and Google Cloud Platform. This approach is consistent with IBM’s strategy of supporting multi-cloud, hybrid environments.

In fact, Red Hat president and CEO Paul Cormier sees the two companies working together well. “Red Hat adds StackRox’s Kubernetes-native capabilities to OpenShift’s layered security approach, furthering our mission to bring product-ready open innovation to every organization across the open hybrid cloud across IT footprints,” he said in a statement.

CEO Kamal Shah, writing in a company blog post announcing the acquisition, explained that the company made a bet a couple of years ago on Kubernetes and it has paid off. “Over two and half years ago, we made a strategic decision to focus exclusively on Kubernetes and pivoted our entire product to be Kubernetes-native. While this seems obvious today; it wasn’t so then. Fast forward to 2020 and Kubernetes has emerged as the de facto operating system for cloud-native applications and hybrid cloud environments,” Shah wrote.

Shah sees the purchase as a way to expand the company and the road map more quickly using the resources of Red Hat (and IBM), a typical argument from CEOs of smaller acquired companies. But the trick is always finding a way to stay relevant inside such a large organization.

StackRox’s acquisition is part of some consolidation we have been seeing in the Kubernetes space in general and the security space more specifically. That includes Palo Alto Networks acquiring competitor TwistLock for $410 million in 2019. Another competitor, Aqua Security, which has raised $130 million, remains independent.

StackRox was founded in 2014 and raised over $65 million, according to Crunchbase data. Investors included Menlo Ventures, Redpoint and Sequoia Capital. The deal is expected to close this quarter subject to normal regulatory scrutiny.


By Ron Miller

UIPath files confidential IPO paperwork with SEC

UIPath, the robotic process automation startup that has been growing like gangbusters, filed confidential paperwork with the SEC today ahead of a potential IPO.

UiPath, Inc. today announced that it has submitted a draft registration statement on a confidential basis to the U.S. Securities and Exchange Commission (the “SEC”) for a proposed public offering of its Class A common stock. The number of shares of Class A common stock to be sold and the price range for the proposed offering have not yet been determined. UiPath intends to commence the public offering following completion of the SEC review process, subject to market and other conditions,” the company said in a statement.

The company has raised over $1.2 billion from investors like Accel, CapitalG, Sequoia and others. Its biggest raise was $568 million led by Coatue on an impressive $7 billion valuation in April 2019. It raised another $225 million led by Alkeon Capital last July when its valuation soared to $10.2 billion.

At the time of the July raise, CEO and co-founder Daniel Dines did not shy away from the idea of an IPO, telling me:

“We’re evaluating the market conditions and I wouldn’t say this to be vague, but we haven’t chosen a day that says on this day we’re going public. We’re really in the mindset that says we should be prepared when the market is ready, and I wouldn’t be surprised if that’s in the next 12-18 months,” he said.

This definitely falls within that window. RPA helps companies take highly repetitive manual tasks and automate them. So for example, it could pull a number from an invoice, fill in a number in spreadsheet and send an email to accounts payable, all without a human touching it.

It is a technology that has great appeal right now because it enables companies to take advantage of automation without ripping and replacing their legacy systems. While the company has raised a ton of money, and seen its valuation take off, it will be interesting to see if it will get the same positive reception as companies like Airbnb, C3.ai and Snowflake.


By Ron Miller

New Relic acquires Kubernetes observability platform Pixie Labs

Two months ago, Kubernetes observability platform Pixie Labs launched into general availability and announced a $9.15 million Series A funding round led by Benchmark, with participation from GV. Today, the company is announcing its acquisition by New Relic, the publicly traded monitoring and observability platform.

The Pixie Labs brand and product will remain in place and allow New Relic to extend its platform to the edge. From the outset, the Pixie Labs team designed the service to focus on providing observability for cloud-native workloads running on Kubernetes clusters. And while most similar tools focus on operators and IT teams, Pixie set out to build a tool that developers would want to use. Using eBPF, a relatively new way to extend the Linux kernel, the Pixie platform can collect data right at the source and without the need for an agent.

At the core of the Pixie developer experience are what the company calls “Pixie scripts.” These allow developers to write their debugging workflows, though the company also provides its own set of these and anybody in the community can contribute and share them as well. The idea here is to capture a lot of the informal knowledge around how to best debug a given service.

“We’re super excited to bring these companies together because we share a mission to make observability ubiquitous through simplicity,” Bill Staples, New Relic’s Chief Product Officer, told me. “[…] According to IDC, there are 28 million developers in the world. And yet only a fraction of them really practice observability today. We believe it should be easier for every developer to take a data-driven approach to building software and Kubernetes is really the heart of where developers are going to build software.”

It’s worth noting that New Relic already had a solution for monitoring Kubernetes clusters. Pixie, however, will allow it to go significantly deeper into this space. “Pixie goes much, much further in terms of offering on-the-edge, live debugging use cases, the ability to run those Pixie scripts. So it’s an extension on top of the cloud-based monitoring solution we offer today,” Staples said.

The plan is to build integrations into New Relic into Pixie’s platform and to integrate Pixie use cases with New Relic One as well.

Currently, about 300 teams use the Pixie platform. These range from small startups to large enterprises and as Staples and Asgar noted, there was already a substantial overlap between the two customer bases.

As for why he decided to sell, Pixie co-founder (and former Google AI CEO Zain Asgar told me that it was all about accelerating Pixie’s vision.

“We started Pixie to create this magical developer experience that really allows us to redefine how application developers monitor, secure and manage their applications,” Asgar said. “One of the cool things is when we actually met the team at New Relic and we got together with Bill and [New Relic founder and CEO] Lou [Cirne], we realized that there was almost a complete alignment around this vision […], and by joining forces with New Relic, we can actually accelerate this entire process.”

New Relic has recently done a lot of work on open-sourcing various parts of its platform, including its agents, data exporters and some of its tooling. Pixie, too, will now open-source its core tools. Open-sourcing the service was always on the company’s roadmap, but the acquisition now allows it to push this timeline forward.

“We’ll be taking Pixie and making it available to the community through open source, as well as continuing to build out the commercial enterprise-grade offering for it that extends the New Relic one platform,” Staples explained. Asgar added that it’ll take the company a little while to release the code, though.

“The same fundamental quality that got us so excited about Lew as an EIR in 2007, got us excited about Zain and Ishan in 2017 — absolutely brilliant engineers, who know how to build products developers love,” Bessemer Ventures General Partner Eric Vishria told me. “New Relic has always captured developer delight. For all its power, Kubernetes completely upends the monitoring paradigm we’ve lived with for decades.  Pixie brings the same — easy to use, quick time to value, no-nonsense approach to the Kubernetes world as New Relic brought to APM.  It is a match made in heaven.”


By Frederic Lardinois

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.


By Ron Miller