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Application Performance Monitoring Industry IPOs Heating Up

Posted on Friday, Feb 7th 2014

The $2.12 billion application performance monitoring industry is looking at quite a few IPOs this year. Recently, we looked at AppDynamics which was evaluating a possible IPO. Here is a quick insight into another player in the industry, New Relic, which is also headed down the IPO route.

New Relic’s Offerings

San Francisco-based New Relic was founded in 2008 when entrepreneur Lew Cirne sold his earlier venture Wily to Computer Associates and left CA to explore the cloud for business opportunities. Today, the company claims to have more than 80,000 actively connected accounts and caters to over 18 million developers worldwide. Their service has helped analyze over 212 billion metrics captured daily across more than 2 million applications.

New Relic’s products enable corporate IT departments to track performance of Internet-based applications through easy-to-deploy, inexpensive tools that are deployed on the cloud. Their service analyzes multiple data points daily and delivers results on the performance of network hardware, server operating systems, databases, applications, and wireless and desktop devices. New Relic prides itself in being a simple tool. Its simplicity was inspired when Cirne realized how easy it was to begin operating his iPhone without having to go to a wireless store to be activated. He wanted to deliver technology that was as easy to use for enterprises as well.

New Relic’s Financials

New Relic operates on a freemium model. The basic version of the web app product that features 24-hour data retention, and online/email support is available to consumers for free forever. For organizations, New Relic is available at a monthly subscription starting at $199 per month for start-ups with up to 10 employees and $499 per month for organizations with 20 employees. Additional features available include unlimited data retention and advanced support features. Similarly, the basic mobile app monitoring solution is available for free while the enterprise level tool is available for a monthly subscription. They have amassed an impressive customer list which includes the names of Comcast, Mashable, AirBnB, and ESPN to name a few. During the third quarter last year, New Relic saw their paying customer list double over the year when they added more than 1,300 paying customers.

New Relic does not disclose detailed financials, but they have confirmed that they are on path to surpassing $100 million in revenues this year. Till date, they have raised $175 million in venture funding from investors including Benchmark, Trinity Ventures, Tenaya Capital, Allen & Company, DAG Ventures, Four Rivers Group, Insight Venture Partners, Lehman Brothers Venture Partners, Passport Capital, T. Rowe Price, and Dragoneer Investment Group. Their last round of funding was held in January last year, when they raised $80 million in funding at a valuation of $750 million. New Relic has confirmed that their next round of funding will come from an IPO and they recently appointed ex-Square CFO Ms. Sarah Friar as their CFO.

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