New Relic Delivers a Strong IPO

According to Gartner, the global app monitoring market grew 13% to reach $2.4 billion in 2013. The researcher believes that new companies with simpler models are making bigger waves in the market.

New Relic’s Offerings
San Francisco-based New Relic is one such company. Their cloud-based suite of products enables organizations to collect, store, and analyze software data in real time. The software analysis leads to an efficient technology department that is able to find and fix performance problems as well as predict and prevent future issues. The platform helps program managers address questions such as how a new product launch is being received, or how a variable change is impacting customer behavior without the product manager having to wait for help from IT.

As of September 30 this year, New Relic had collected, stored, and analyzed over 690 billion data points daily across 4 million application instances and monitored user experiences on more than a million website domains and from over one billion mobile application installs. Additional metrics included a user base of more than 250,000 and 10,590 paid business accounts.

New Relic’s products are designed so that they are easy to deploy and scale to let customers realize benefits and results soon after deployment. They collect and organize user data for analysis through a simple dashboard interface that is easy to configure and track key metrics.

New Relic’s Financials
Like other new age companies, New Relic offers both a basic free model and a subscription-based product that comes with additional features. For organizations, subscription to New Relic is available at prices starting at $199 per month for smaller organizations that have up to 10 employees and $499 per month for organizations with 20 employees.

For their fiscal year ended March 2014, revenues grew 113% to $63.2 million. For the six month period ending September 2014, revenues increased 83% to $48 million. Losses have also increased over the years. Losses for fiscal 2014 came in at $40.2 million compared with $22.5 million reported a year ago. For the six months ended September 2014, losses have increased from $18.6 million to $19.4 million.

Till recently, New Relic had raised $214.5 million in venture fund from investors including Fidelity Investments, Wellington Management, T. Rowe Price, Passport Capital, BlackRock, Dragoneer Investment Group, Benchmark, Passport Ventures, Tenaya Capital, Trinity Ventures, DAG Ventures, Allen & Company, and Four Rivers Group. Their last round of venture funding was held in April 2014 when they raised $100 million in a round led by BlackRock and Passport Ventures at a valuation of $1 billion, a increase over previous year’s valuation of $750 million.

Last week, New Relic listed on the NYSE under the ticker NEWR last week. They raised $115 million by selling 5 million shares at a price of $23 each. Soon after listing, the stock touched a high of $35.25 and is current trading at $31.22 with a market capitalization of $1.44 billion.