Having spent last few decades building startups, Lew Cirne, founder and chief executive of the San Francisco-based software company, New Relic, knows one thing: building a company takes a long time and often needs patient and deep pocketed investors. And while sales for his company are growing at rapid clip, he just raised $80 million in funding from Insight Venture Partners and T.Rowe Price to turbocharge his way towards a 2014 public offering.
Previous investors including Benchmark Capital participated in this round as well. Insight and T. Rowe Price accounted for three-fourths of the latest round of funding, with half of the total money coming from Insight. The company has so far raised about $115 million, and after this round is valued at $750 million. Cirne had previously started Wily, which he sold to CA for $375 million. He started New Relic to offer network application monitoring as a cloud-service back in 2008. He declined to share the company’s revenues but they are estimated to be in the range of tens-of-millions of dollars.
“We are aiming to eventually go public and all the pieces are in place for us,” Cirne said in a conversation. Cirne is betting that company will keep the current trajectory and will go public, perhaps as soon as 2014. He wants to take a page from the play book of single-product companies VMWare (S VMW) and Salesforce (S CRM) which took relatively simple, but fast-growing products – virtualization software and on-demand CRM – to build large software companies.
“We are at a point we have a large market and have a strong story so we want to put the foot on the gas,” said Cirne. According to him, the company tripled its revenue growth in 2012 and doubled its customer base during the year. New Relic customers include Comcast (s cmcsa), Sony (s sne), ESPN (s dis), Nike (s nke), and E*Trade (s etfc).
New Relic is one of the growing number of startups that are capturing the upside presented by technological shift to the cloud and the mobile. “Our next area of focus is mobile, and mobile visibility,” Cirne said. “Virtually every one of our customers is asking for more mobile intelligence.”
The company recently announced a brand new iPhone app that is getting positive reviews from New Relic customers. In addition, the company is looking to expand its presence in Europe and also ramp-up its sales efforts. The company currently has 200 employees and it plans to add another 100 in next few months.
When I asked Cirne if he is going to go out and make acquisitions, he said his preference is to build products in-house but again, he knows time is of essence and will be opportunistic because “sales are very important to us as well.” With a valuation of $750 million it has some flexibility when it comes to making acquisitions.
My colleague Derrick Harris wrote about Cirne’s management strategy and how he turned New Relic into a sales machine. New Relic was named to the GigaOM Structure 50 list in 2011 and was one of our picks for cloud startups to watch.
Great story, I will be interested to see their mobile intelligence offering. Love the bus!
Mobile application monitoring is hot – no doubt about that. But its also a risky business for enterprise software companies. Unlike application management where enterprise software can lead the way, application monitoring has roots also in the consumer market. One can wake up one day and find similar functionality in the app store. Moreover Android and iOS may pose restrictions in opening the gate for agents. Not to say that these platforms may bring that functionality on their own eventually with better performance. Monitoring applications on mobile is a risky business – simply because its a convergence area between the enterprise and consumer markets.