Today AppDynamics announced that we’ve secured a $50 million Series D funding led by Institutional Venture Partners (IVP). It is a milestone event for our company and I thought I’d take a moment to answer two key questions: Why another funding round, and why right now?
The first answer is that we need the money to scale to meet the demand for our product in the marketplace. The demand for our product and the growth of our company has far outpaced even our most aggressive growth projections. When I founded AppDynamics in 2008, my goal was simple: to make applications easier for ops and dev to manage by telling them relevant, actionable information about what’s going on at the code level and how that ties back to the business and the end users. My approach with AppDynamics was to build a scalable and intelligent product capable of understanding complex applications and automatically instrumenting, baselining and analyzing them. The intelligence of the product has been met with tremendous success among the owners of large, distributed applications, as our customers will attest – they’ve given our product a Net Promoter Score (NPS®) of 81, which is outstanding for enterprise software (the average NPS for software companies was 41 in 2012).
With our customers’ support, we’ve been able to soar past our revenue goals for the last two years running, allowing us to double our employee count and begin to expand internationally. We are now managing 51 Billion transactions every day across our customer base, and our customers include some of the most popular (and some of the most complex) apps in the world – Netflix, Orbitz, Expedia, Tivo, Overstock.com, Fox News, Staples, Time Warner Cable, Intuit, and Priceline.com–just to name a few.
After much consideration, the executive team and I have decided to continue on this trajectory and scale to meet demand by securing a growth round of financing. We’ll use this money to reinvest in engineering, scale sales and marketing, and expand our presence overseas, especially in Europe and Asia. That’s the first answer to the why we got the funding: we need the money to scale to meet demand.
The second answer is that we have a long-term vision for our product and our company that this money will help us to realize. Today’s world is run on software (or as Marc Andreesen put it, “software is eating the world”). Whether you’re buying concert tickets, booking a flight, buying clothes or saving for retirement, almost everything you do is handled by software. That means that everything we do in our life these days is supported by millions of lines of code, not all of which is perfect. Our vision is to make this software run better by instrumenting, analyzing, and optimizing every single line of code, and giving everyone from developers to CEOs to consumers insight into the software that forms the foundation of the modern world. We are already helping many of these applications; whether you are watching movies online, or booking flights, or filing insurance claims, or filing tax returns, or buying concert tickets, our software is helping people to get the best experience. But we have many many more applications to help.
To fulfill this mission, we have an aggressive product roadmap that demands resources both from Research & Development and the business side of our company. We need to invest in order to help us realize this vision of making the software of the world run better.
For now, I would like to thank our customers for helping us achieve this milestone as a company. We’re very grateful for the continued support of thousands of application support teams that have put their trust in us – some of them when we were still an unknown quantity. To them, we give our sincere thanks. For those of you who are just encountering us for the first time, welcome. We have an exciting road ahead of us, and we hope you’ll join us on the journey.