Armed with a $150 million funder, Raleigh-based Pendo could be on its way to an initial public offering.
That’s according to CEO Todd Olson, speaking Tuesday on the heels of the funding announcement, which pushes the 8-year-old firm’s valuation to a whopping $2.6 billion.
“This gives us a pretty long runway, I’m not going to lie,” Olson said, speaking from the company’s San Francisco office.
Pendo was already well-capitalized, having announced a separate, $100 million raise in late 2019. The majority of that round “is still available,” Olson said. And the company recently passed the $100 million in annual recurring revenue milestone.
Pendo’s technology aims to help product and IT teams drive adoption of the software they build for customers or their internal employees.
The latest raise “keeps us investing aggressively in our growth,” Olson said. And that could include a future as a public company.
“That’s certainly a possibility,” Olson said. “Our job is to prepare the company to possibly be a public company. Whether or not we go public becomes a matter of how the markets are, what the general business climate is. But yeah, I think we’re doing the things we need to do to prepare our company for that step, that possibility.”
Already, the firm has made changes to its C-suite that seem to point in that direction. The firm recently announced a new chief revenue officer in Jennifer Brannigan and a new chief counsel in Jennifer Zador – both with public company experience (at LinkedIn and SolarWinds, respectively). And Pendo is in the process of interviewing candidates for a chief product officer role. Olson said it’s looking for individuals with scaling experience.
As far as the present, Olson said not to expect the growth strategy to change in terms of new hires. But he does say there’s a possibility that some of the cash could go toward acquisitions.
Startup watchers in the region say Pendo’s funding news is bigger than just one company.
Lister Delgado, whose Idea Fund Partners was an early backer of Pendo’s, calls it a “great milestone for the Triangle.
“A $150 million round for a Triangle company that is less than 10 years old is truly fantastic,” he said. “Pendo is one step closer to being a public company one day.”
Delgado called Pendo’s milestones – the funder along with crossing the $100 million run rate revenue mark – “markers that folks look for when they think about whether our market compares positively to other top markets.”
“This is a very clear and tangible example that all these great metrics are very much achievable by North Carolina and Triangle startups,” Delgado said.
Investors not connected to Pendo also said the news was worth celebrating.
Scot Wingo, angel investor and CEO of Get Spiff, said it’s great for everyone – particularly if Pendo does eventually go public. Wingo, who took ChannelAdvisor public as its CEO, had no insider information, but he said the Pendo round feels like a mezzanine round, the tranche before an IPO.
“Personally, I’d love to see a big, multi-billion dollar Pendo IPO, that would be a triple win,” he said, pointing to three factors – the return for local investors, the public relations boost to the area, and “hundreds of newly minted Pendo millionaires with an entrepreneurial mindset in the ecosystem.”
David Gardner, founder of Cofounders Capital, said it’s a big deal to the region to have a company that attracts these kinds of checks. But he said it’s not enough.
“We need a bunch more of these, but the only way to make that happen is more early stage investment dollars and that is the part we have to do ourselves,” he said. “VCs from other states will come here to write $20 million Pendo investments, but they are not going to fly here to write $1 million checks … in early stage startups that are going to need a lot of hand holding.”
With its latest investment, Pendo has raised about $356 million in total outside dollars. The latest raise was led by B Capital Group with participation from Silver Lake Waterman and existing investors, including IDEA Fund Partners.
