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BlackLine Closing in on the Billion Dollar Unicorn Club

Posted on Tuesday, May 5th 2015

Continuing with our coverage of Billion Dollar Unicorns and possible contenders, here is the interesting story of BlackLine – a company that offers scalable applications to automate financial closing and other accounting processes.

BlackLine’s Offerings

Los Angeles-based BlackLine was founded in 2001 by programming enthusiast and entrepreneur Therese Tucker. Therese had come into some money when she retired from SunGard after her prior company ADS Associates was sold to them. BlackLine began as a wealth management software company. Soon, though, Therese realized that the wealth management market was a tough one to break into given the dominance of bigger players like Thomson Reuters and Merill Lynch who had multi-billion dollar wealth management software budgets. Getting them to trust a small five employee startup for their software requirements was not easy.

Their first break came when they got First National Bank of Nebraska as their client who was frustrated with the absence of a solution to help with banking reconciliations. Based on her discussions with the client, Therese realized there was an untapped market opportunity for the development of an automated solution for account reconciliations.

Soon enough, BlackLine became the leader in Enhanced Finance Controls and Automation software. They are the only provider today that offers a completely integrated cloud platform that is able to support the entire record-to-report process and host other key accounting and financial processes. Their software automates and centralizes all close activity and documentation in a single repository, integrates it with ERP systems, and streamlines the financial closing process. Today, they have over 100,000 users in more than 100 countries using their suite of applications, which include Corporate Performance Management, Governance Risk and Compliance, and Enterprise Resource Planning systems. Their 1300 customers include names like AT&T, Boeing, Costco, eBay, Kimberly-Clark, Northrop Grumman, and United Airlines.

BlackLine’s Financials

BlackLine does not disclose their detailed financials, but revenues have grown fast. Back in 2009, the company recorded under $7 million in revenues. Since then, they have been growing at annual rates of over 50%. Today, BlackLine operates with annual recurring revenues of over $65 million and are expected to hit the $100 million mark soon.

BlackLine was bootstrapped by Therese in the early days. But in 2013, they took private equity investment from Iconiq Capital and Silver Lake Partners. The terms of the investment were not disclosed, but the valuation was above $200 million. In that round, the management team and early friends and family backers took liquidity. BlackLine’s market valuation is not known, but given their rapid growth and the wide acceptance of their product by big brands, a Unicorn status is within reach. They have not yet filed to go public, but an IPO is on the horizon. This is one of the companies that is not all hype, but actually builds software that large enterprise customers really like. Hence, my bet is that when Therese chooses to take BlackLine public, the company will be able to sustain its valuation based on fundamentals.

I recently met up with Therese again as part of our 1M/1M Roundtable. You can listen to the recording here.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

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