Cohesity IPO not So Far

Cohesity, Inc. announced a new company valuation of $3.7 billion, which is $1.2 billion higher than its valuation less than 12 months ago.

This growth in valuation continues to validate the trajectory and momentum the firm is seeing as the modern multicloud data management company.

The valuation was established in line with a $145 million tender offer made by investors to employees who want the option to sell a small portion of their equity for liquidity.

This non-dilutive transaction was led by STEADFAST Capital Ventures and supported by a syndicate of new and existing investors, including Premji Invest.

“We are pleased to enable this liquidity opportunity for our employees,” said Mohit Aron, CEO and founder. “We believe the oversubscribed, non-dilutive tender offer based upon this increased company valuation speaks volumes about Cohesity’s performance and future outlook as the leading, modern data management company.”

The valuation comes as the company is reporting record results from its fiscal second quarter ending Jan. 31, 2021. It saw significant Y/Y growth in annual recurring revenue (ARR), a continued surge in customer wins globally, and an increasing number of customers spending $5 million or more in total lifetime spend on its software. The company also saw traction across its partner and service provider ecosystem.

“Cohesity is firing on all cylinders with significant increases in annual recurring revenues, exceptional customer and partner momentum, and impressive growth in overall customer spend,” said Karan Mehandru, MD and head of VC STEADFAST Capital Ventures. “The company also continues to introduce software innovations that are transforming data management – including Data Management as a Service. This game-changing SaaS technology is unleashing new opportunities for midsize and enterprise customers to simplify data management and do more with their data. At STEADFAST, our goal is to partner with exceptional entrepreneurs building iconic and durable companies that are built to last, and our partnership with Mohit and the Cohesity team is a shining example of that strategy at work.”

“Cohesity continues to disrupt the data management market. The Cohesity Helios multicloud data platformhttps://www.cohesity.com/products/helios/ uniquely empowers organizations to easily manage their data, mitigate the risks of ransomware attackshttps://www.cohesity.com/solutions/ransomware/, eliminate infrastructure silos, and solve mass data fragmentation,” said Sandesh Patnam, managing partner, US, Premji Invest. “Given Cohesity’s continued innovation, excellent NPS customer support scores, strong leadership, and vision for the future, we are very optimistic about Cohesity’s continued success in the market. We believe the new valuation is a fraction of the value Cohesity will be worth long-term.”

Expanded Company Valuation Follows Strong Q2 Results
The following metrics highlight record-breaking results the firm achieved during Q2, its most recently completed quarter:
ARR growth: It achieved a nearly 90% increase Y/Y (Q2/Q2) in ARR, further emphasizing the success of the company’s subscription-based software model.
Net expansion rate: its net expansion rate – or the rate of expansion net of churn from existing customers over the last year – continues to exceed 130%, a benchmark for leading subscription/SaaS companies. This means that ARR from existing customer set grew over 30% over the last 12 months.
Customer growth: It saw a 50% increase Y/Y (Q2/Q2) in the number of customers with rapid adoption in the Americas, EMEA and AsiaPac/Japan regions, with more than 2,300 customers.
Strength among the Fortune 500: Customers include 2 of the top 5 Fortune 500, 2 of the top 5 US banks, more than 300 financial services organizations globally, and 3 of the top 5 pharmaceutical companies globally.
Growth in customer spend: It realized an 84% increase Y/Y (Q2/Q2) in the number of customers that spent between $1 million and $5 million on its software in total lifetime spend, and a 300% Y/Y (Q2/Q2) increase in customers with more than $5 million in total lifetime spend.
Channel partners: The number of partners that have booked $1 million or more in business grew 46% Y/Y (Q2/Q2). It is not only expanding its base of partners, but going deeper with partners as more customers embrace its multicloud platform and data management offerings.
Record-breaking quarter with service providers: It realized its biggest quarter ever with service providers, seeing a 208% growth in bookings Y/Y (Q2/Q2). It also signed 16 new service providers globally in Q2, including Move AS, NetNordic, and US Signal.

Cohesity customers span an array of verticals including financial services, healthcare, government/ public sector, pharmaceutical, retail, technology, transportation, education, and M&E. Customers include: Cisco, Northumbria Police (UK), Novartis, Proliance Surgeons, Siemens AG, SiteOne Landscape Supply, Sky Lakes Medical Center, Stockport NHS Foundation Trust, the National Aeronautics and Space Administration (NASA), the San Francisco Giants, US Department of Homeland Security, and US Department of Labor.

Q2 Product Innovations and Industry Accolades
The company introduced SaaS offerings in Q2 and received accolades for its cloud leadership, partner program, and recognition from industry analyst firms:
New SaaS offerings: In December, it announced the availability of DataProtect delivered as-a-service. This SaaS-based offering, the first of many to come as part of firm’s comprehensive Data Management as a Service (DMaaS) solution, gives customers an easy way to make sure their on-premises and cloud-based data is backed up and protected.
Partner Program of the Year: In December, Cohesity won the Partner Program of the Year award from Channel Partner Insight (CPI). These annual awards recognize the companies that are powering the US IT channel.
Customers’ Choice: In January, for the fourth time in a row, the company was named a Customers’ Choice in the Gartner Peer Insights ‘Voice of the Customer’: Data Center Backup and Recovery Solutions. It was the only customers’ choice vendor recognized in the following categories: global enterprises, healthcare, and services industries.
Cloud leadership: In February, CRN named the company one of its 100 Coolest Cloud Companies for 2021 for the second year in a row. The annual list recognizes the leading cloud technology providers in five critical categories: infrastructure, monitoring and management, security, storage, and software.