The Datadog IPO just happened, and it’s proven to be a resounding success, not surprisingly given the company’s superb metrics – big revenues ($333M ARR), happy customers that keep buying more (146% net revenue retention) and, unlike many others, a history of profitability. To make the story even more epic, it transpired that the company had turned down a last minute big acquisition offer from Cisco shortly before the IPO, which valued the company higher than its proposed IPO range.
While I’m a small personal shareholder in the company and friendly with its founders, this is not going to be a VC victory lap kind of a post, for the simple reason that I did not invest in the company as a VC (as the early rounds of financing took place before my current tenure, in my defense!).
Regardless, I wanted to write a few quick thoughts, as I believe this particular IPO should be loudly celebrated.
It is certainly an enormous success for its founders, employees, investors and customers, who deserve a tremendous amount of congratulations for this amazing success.
Beyond, here are few things I personally find very cool:
First, it’s a fantastic, indisputable win for the New York startup community, in particular its fledging enterprise tech segment. Anyone who grew up professionally in the NYC tech community heard many times the same question: “where are the big exits?”. Those of us particularly interested in enterprise tech also heard many times that great infrastructure companies could only be built in the Valley. Well, there you go. On top of the success of MongoDB not that long ago, New York has produced another superb enterprise company and a multi-billion dollar IPO. It’s certainly possible to criticize other current IPO candidates such as WeWork and Peloton as “non-tech companies”, but Datadog is indisputably the perfect incarnation of what a great software company should look like. Its success will flow through the NYC tech ecosystem for years to come through seasoned talent, angel investment and simply showing to all entrepreneurs what can be done in New York.
Second, Datadog is a great success of a type of company I’m very excited about – startups with a foot on the East Coast and a foot in Europe. Started by two French founders in New York, Datadog expanded to other US locations such as Boston and built a major presence in France for its tech teams. While they come at it with different histories and angles, we’re seeing more and more companies with technical and product teams in Europe and commercial operations in the US – increasingly so in New York or Boston, rather than the West Coast. The Datadog IPO demonstrates that this model just works.
Finally, the Datadog IPO is a refreshing example of a company that stayed mostly heads down throughout its history, largely eschewing the tech echo chamber. Many people, even in New York, had not heard of it until recently, or had no idea of its magnitude. Even today, while the IPO is grabbing some headlines, the response in the tech world has been somewhat muted, at least compared to the frenzy on Twitter and tech blogs when Zoom, a company of comparable magnitude, went public. Perhaps some of it has to do with the fact that enterprise tech is less directly relatable than video conference or consumer products. But the key reason is that its founders and employees were largely deeply throughout the company’s history on building great products and serving customers, and avoided the temptations of tech fame. It’s just awesome to see great people with great values win.
Huge congratulations to Olivier and Alexis on an amazing (and amazingly well-deserved) success! (And a big thank you to K Young for getting me into Datadog. 🙂 )
Bonus: Alexis spoke at Data Driven NYC a couple of times over the years (and Olivier spoke at our CloudNY event), here’s the most recent video.