Monday, March 30

Datadog’s successful IPO values ​​APM specialist at $ 10bn

Datadog can boast of having achieved one of the most beautiful IPOs of the month at Nasdaq on September 19th. Specialized in application performance management, a particularly buoyant market at the time of the migration of applications in the cloud, the company founded in 2010 by the French Olivier Pomel and Alexis Lê-Quoc installed in New York, managed to raise $ 648 million during this initial public offering, while initially counting on $ 100 million when filing its file with the SEC. This successful introduction has earned APM’s software company more than $ 10 billion in value.

Datadog has put up for sale 24 million shares, or about 8% of the capital . The DDOG title, introduced at $ 27, well above the $ 19 to $ 22 originally planned, ended its first day of trading at $ 37.55, a jump of 39%. During the day, the stock even peaked at $ 40.65 (+ 49%). It is currently listed between $ 34 and $ 36 (last listing yesterday at the close of the stock market). A great success for a company whose turnover doubled between 2017 and 2018 to reach $ 198 million in 2018 and increased by 79% over the first six months of the year to $ 153.3 million. According to the financial site Seeking Alpha, the company has earned $ 266 million over the last 12 months. The current valuation is 37 times higher. Based on a growth rate of 60% over the next 12 months, the estimated turnover is $ 426 million, or 24 times the current valuation.

Coveted technology in a competitive market

Investors have not been the only ones interested in this platform for monitoring and analyzing cloud applications for developers, operational IT teams and business users. Just before the IPO, Cisco, number 1 in network solutions, sought to buy the APM solutions provider (as it did in 2017 for AppDynamics, another APM specialist, the day before his IPO) by proposing him $ 7 billion, but he rejected his offer. There are still many independent players in the APM market, alongside major generalists and cloud service providers like AWS. Among Datadog’s main competitors are publishers such as New Relic, Dynatrace, Sysdig, SolarWinds or Splunk, which has just offered itself in this SignalFx domain that monitors the containerized cloud applications in real time. An actor like Elastic has also developed its offer in this direction. Some of these specialists have also benefited from the success of Datadog. On the day of the IPO, the action of Elastic took 2.4%, that of Dynatrace 2.5%, that of New Relic 4.5% and that of Splunk 5.6%.

Last July, Datadog gathered 1400 partners and users in New York on its Dash conference . During this, the publisher launched its Network Performance Monitoring solution, initially accessible in private beta. The software provides a multi-cloud visibility in network flows in a granular way, allowing to aggregate and monitor this data using all the tags available on the Datadog platform.