Devo, a Boston startup that specializes in log management and cybersecurity, today announced it had closed a $250 million funding round. Devo's new capital is valued at $1.5 billion.
The new investment was dubbed a Series E. TCV led it, along with two new investors, General Atlantic and Eurazeo. A number of previous investors contributed cash, as is typical in rounds this large. TechCrunch was told by the new unicorn that the round was preempted several months before it was due to raise, and that it was also four times more than it was anticipated.
How does Devo attract such high interest? Revenue expansion, we reckon. According to Marc van Zadelhoff (CEO), the company saw solid growth over the past year. He told TechCrunch that Devo has doubled its revenue, employees, and customers in this time period. Van Zadelhoff stated that the company's goal is to double in the next year.
Double the growth rate is a common goal for startups that are already scaling. In fact, 100% growth is a common goal for startups already at scale. This rule of thumb can be used to help you scale towards an IPO.
TechCrunch was not able to get a reply from the company about its future IPO plans. It stated that it will be able to establish an IPO within two years with its new capital. We expect Devo will either reach its public offering with this tranche of cash, or possibly with another slug of funds prior to filing an S-1.
All that's financial arcana. But what does the company do?
Log management is a nightmare!
In corporate-speak. Devo is a cloud-native logging company that sells security analytics and logging. We have you covered.
Digital products emit exhaust when you interact with them. This log file contains the following: User X did y at z time with z product, and that kind of thing. Given the number of users and complexity of their products, large companies can generate many such files. There are many products available.
Devo's service compiles log files of customers into a central repository. This allows for 400 days of data to be stored in an easily retrievable manner. It offers two products from the log files, one for cybersecurity and one for IT support. The cybersecurity tool is the most popular of the two.
Both are powered by the log platform. Let me explain by using an analogy that I used to talk with Devos CEO. It was a simple one: If log files from a company are like stock or broth, it is a form of stock. Devos IT-focused products and cybersecurity are similar to different soups made from the same base liquid (logdata). The same foundation, but different soup flavor.
Although it is not perfect, we believe that it will help in some way.
TechCrunch was interested in the 400-day figure. This is the right time frame to keep log files in order. It's a 13 month timeframe; the company will have log data for all customers for the full year. One more month is available to allow for year over-year comparisons. This seems reasonable.
Why not store more data? It is likely that the data being stored has a diminishing return. However, it could be possible to increase the storage space by reducing compute and storage costs. Let's see.
Devo plans to use the new capital to expand its team as tech startups do when they raise funds. Additionally, Devo is working to allow other companies to build on its log platform, and to expand internationally. Devo also spoke out about the possibility of tuck in acquisitions.