IPO Watch – PagerDuty (PD)
Set to debut tomorrow, with its lead underwriters Morgan Stanley, JPMorgan, RBC Capital, and Allen & Co., PagerDuty provides a platform for real-time operations. According to the company, they “act as the central nervous system for the digital enterprise.” According to their S-1 filings, their platform collects signals from virtually any software-enabled system or device, correlates and interprets signals to identify events, and engages the right team members to take action in real time. Their platform learns from every incident, allowing teams to be proactive and incorporate best practices into their operations to improve performance.
As a background, PagerDuty was founded by three former Amazon.com developers who were often asked to provide on-call support for their applications. Frustrated with the inefficiencies of existing solutions and the resulting negative impact of these solutions on their day-to-day lives, they started PagerDuty with the goal of building effective, easy-to-use software that enhances the lives of on-call responders while improving their productivity and work-life balance. Since founding the company in 2009, the platform has evolved. They have expanded their capabilities from a single product focused on on-call management to a real-time operations platform, spanning event intelligence, incident response, on-call management, business visibility, and analytics.
With regards to its market opportunity, the company estimates there are approximately 85 million users in the developer, IT, security and customer support segments, where they currently have less than 1% penetration. As a result, they estimate their total addressable market is over $25B, which they calculate by multiplying their estimate of 85M potential users by their average revenue per user for the fiscal year ended January 31st, 2019.
PagerDuty currently has a global customer base of almost 11,000 organizations of all sizes and across all industries. Among this customer base, the platform is used by a passionate and growing community of over 350,000 paid users, including teams across software developers, IT, customer support, security operations, and increasingly, business operations departments and industrial operations. Here are some examples the company provided:
• Box (BOX) users PagerDuty to help ensure that its services are always available to its customers, leveraging PagerDuty Modern Incident Response to run automated response plays that enable teams to mobilize faster and take action in real time.
• GoodEggs uses PagerDuty to enable warehouse operations and development teams to analyze signals from refrigeration units to ensure food stays fresh for deliveries.
• Okta (OKTA) uses PagerDuty for its digital operations to remove friction from the incident response process so that teams can identify, escalate, and resolved incidents, while mitigating customer impact.
• Slack leverages the PagerDuty platform to orchestrate real-time response across teams to maintain high availability and reliability for its millions of users across the world.