Tag: $100M ARR club

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As Q3 kicks off, four more companies join the $100M ARR club

Welcome back to our $100 million annual recurring revenue (ARR) series, in which we take irregular looks at companies that have reached material scale while still private. The goal of our project is simple: uncovering companies of real worth beyond how they are valued by private investors.

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It’s all well and good to get a $1 billion valuation, call yourself a unicorn and march around like you invented the internet. But reaching material revenue scale means that, unlike some highly valued companies, you’re actually hard to kill. (And more valuable, and more likely to go public, we reckon.)

Before we dive into today’s new companies, keep in mind that we’ve expanded the type of company that can make it into the $100M ARR club to include companies that reach a $100 million annual run rate pace. Why? Because we don’t only want to collect SaaS companies, and if we could go back in time we’d probably draw a different box around the companies we are tracking.

$100M ARR or bust

If you need to catch up, you can find the two most recent entries in the series here and here. For everyone who’s current, today we are adding Snow Software, A Cloud Guru, Zeta Global and Upgrade to the club. Let’s go!

Snow Software

Just this week, Snow Software announced that it has crossed the $100 million ARR mark, according to a release shared with TechCrunch. The Swedish software asset management company has raised a few private rounds, including a $120 million private equity round in 2017. But, unlike many American companies that make this list, we don’t have a historical record of needing extensive private capital to scale.

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New York’s BounceX reaches $100M ARR, rebrands

Welcome to the $100 million ARR club, BounceX.

This morning (evening, timezone depending), BounceX, a New York-based marketing technology startup, announced that it has reached the $100 million annual recurring revenue (ARR) threshold, adding its name to our running list of companies that have crossed over into nine-figure revenue while remaining private.

BounceX also announced a name change to Wunderkind, a move that its CEO Ryan Urban told TechCrunch signaled “a new chapter” for the firm. Summarizing the executive’s comments: After seven years in business and quite a lot of work building out its product line and revenue base, BounceX wants to think of itself as something more than merely another SaaS company; the name Wunderkind, in his view, demands that what they create “has to be extraordinary,” fitting into the idea.

Normally we’d gently tease such plainly stated aspirations, but with $100 million in ARR and a history of efficient growth behind the goal, we won’t. Instead, let’s talk about what the company does, and how it has grown to the size that it has.

What’s a BounceX?

I’ll spare you the details and explain what the company does without buzzwords, as best I can.

It starts with Web traffic. Everyone has it. But often you, an online retailer, don’t know who is coming to your website. BounceX (Wunderkind) can help you figure that out, matching anonymous web traffic to email addresses. Now you know some of the folks coming to your site, and how to reach them. Next, Wunderkind can help you send those identified folks targeted emails that match what is known about that person, or email address. The result of all this work is material revenue scale — the company claims that its technology boosts “behaviorally triggered emails to over 9%, on average, of a retailer’s digital revenue.”

As 5 more startups join the $100M club, are we just making a pre-IPO list?

For those doing the math at home, 9% is a lot.

All this works out for Wunderkind as well, with its ability to help companies drive revenue assisting it in landing deals. The company closes new customers pretty efficiently, with Urban telling TechCrunch that his company’s CAC-to-LTV ratio is “is probably the highest in [its] industry,” and has “been going up over time.”

How does it do that? By the company having what it called “really high [deal] close rates.” Fine, but how does the tech drive the company’s close rate? By promising results and cutting itself off if it fails.

Wunderkind runs short-term pilots with potential customers, say four months long. The company will only move to a more traditional SaaS contract if it sufficiently drives revenue for the potential customer. According to Urban, “90 to 95% of the time” his company “deliver[s] the guaranteed revenue.”

And the customer converts, voila!

This method of snagging customers led to Wunderkind having some pretty stellar SaaS metrics. Picking one from TechCrunch’s call with the CEO, “a lot of [Wunderkind sales] reps have north of $3 million quotas a year and they hit,” he said, meaning that they meet that high expectation.

So what?

You can probably see where this is going: What happens when a company has a very strong customer value to customer acquisition cost structure, and a very efficient sales team? It doesn’t burn a lot of capital. Unsurprisingly, Wunderkind has been super efficient to date, with Urban telling TechCrunch that “the amount of equity [his company has] actually put to work is probably sub-$35 million,” with less than $50 million in equity capital raised. The company also has debt lines that it can use, the CEO noted.

Getting from $0 in ARR to $100 million while spending around $35 million in equity-sourced funds is pretty bonkers, but perhaps even more nuts is the fact that, per the CEO, Wunderkind got through its first four years on $1.5 million in external money. Urban chalked the low-burn results to the founding team and early employees having experience working with one another, and building features “purely focused on improving experience [and] driving revenue.”

That’s enough for now, we’ll write about the company more when it reaches its next ARR threshold, executes a secondary transaction to put off an IPO, or files. The lesson from today is that it’s possible to build a SaaS company to-scale with far less revenue than I thought possible. Anyhoo, Wunderkind joins the $100 million ARR cadre with what I think is the second-best result in terms of efficient growth. Only boostrapped Cloudinary has cleaner metrics, though with a smaller ARR total for now.

For more on the $100 million ARR club, you can check out this and this to read about other companies that have been inducted this year.

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As 5 more startups join the $100M club, are we just making a pre-IPO list?

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 Moveable 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.

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Cloudinary passes $60M ARR without VC money

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today we’re continuing our exploration of companies that have reached material scale, usually viewed through the lens of annual recurring revenue (ARR). We’ve looked at companies that have reached the $100 million ARR mark and a few that haven’t quite yet, but are on the way.

Today, a special entry. We’re looking at a company that isn’t yet at the $100 million ARR mark. It’s 60% of the way there, but with a twist. The company is bootstrapped. Yep, from pre-life as a consultancy that built a product to fit its own needs, Cloudinary is cruising toward nine-figure recurring revenue and an IPO under its own steam.

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Seattle’s ExtraHop expects $100M ARR in 2020, IPO the following year

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today we’re continuing our series on companies that have reached the $100 million annual recurring revenue (ARR) threshold, or are about to. ExtraHop is the company of the day, a Seattle-based firm that deals with cloud analytics and a portion of the security world called “network detection and response.”

ExtraHop is interesting because of its scale, its IPO plans and its history of capital efficiency. Regular readers will recall that we’ve praised Braze and Egnyte in this series, noting that, compared to some unicorns and other members of the $100 million ARR club, they had raised modest sums. Both have raised a multiple of ExtraHop’s own known capital tally.

TechCrunch got on the phone yesterday with ExtraHop’s CEO Arif Kareem and CFO Bill Ruckelshaus to dig in more. Here’s what we learned.

Growth

In conjunction with its ARR and IPO notes that we’ll deal with shortly, ExtraHop announced a number of financial metrics this morning, including: more than $150 million in bookings in 2019, up from over $100 million in 2018; and, revenue growth of “more than” 40% in 2019, a threshold it also cleared in 2018.