Posting Its 6th Consecutive Year of Record Revenues, SevOne Receives $150 Million Investment From Bain Capital

January 15, 2013 07:30 ET
Posting Its 6th Consecutive Year of Record Revenues, SevOne Receives $150 Million Investment From Bain Capital

WILMINGTON, DE--(Marketwire - Jan 15, 2013) - SevOne, creator of market leading IT infrastructure management solutions, today announced that it closed 2012 with its 6th consecutive year of record financial results. The company's results were driven by existing customers adding more elements to manage their burgeoning networks as well as adding a record number of new customers. Based on this success, leading business software investor Bain Capital invested $150 million in the company.
"SevOne is the only solution that enables its customers to see all services in real-time within global distributed networks of any scale. The world's largest and most sophisticated customers choose SevOne for its fast time to value and unique peer to peer architecture that scales to address big data network growth," said Ben Nye, Managing Director at Bain Capital Ventures.
"We were attracted by the incredibly high satisfaction levels of SevOne's customers, the unique differentiation of their technology, and the talented management team. We look forward to partnering with the SevOne team to maintain their growth and accelerate their go to market operations," added Ben Holzman, Partner, Bain Capital Ventures.
SevOne provides a highly scalable, easy to deploy IT monitoring and reporting solution that provides high levels of visibility for enterprises, service providers or any entity dealing with challenges around network latency, new service rollout, business interruptions and increasing volume of data on their networks. SevOne's IT Performance Appliances scale cost-effectively without limitation or performance degradation so customers, for the first time, can monitor and manage any IT infrastructure, no matter how massive or complex.
"SevOne is thrilled to partner with Bain Capital as we take the company to the next level," said Mike Phelan, CEO, SevOne. "The investment caps a highly successful 2012 for SevOne. Our bookings doubled year over year, profitability increased significantly and our customer base doubled."
Pacific Crest Securities served as financial advisor to SevOne in this transaction.
About SevOne
SevOne, Inc. delivers the industry's fastest, most scalable, and comprehensive real-time IT infrastructure monitoring, troubleshooting and performance reporting solution. SevOne invented a proprietary, next-generation distributed technology, called the SevOne Cluster™, that combines the cutting edge principles behind peer-to-peer sharing and big data analytics to scale smoothly so that millions of IT elements, across all monitoring technologies, can be managed and provide a single view to the user. Hundreds of customers, including the top cable companies, wireless network and managed service providers, and top financial services institutions rely on SevOne to reduce operating expenses and improve quality of service. SevOne was recently named the 75th fastest growing company in North America on Deloitte's 2012 Technology Fast 500 rankings.
About Bain Capital
Bain Capital, LLC (www.baincapital.com) is a global private investment firm that manages several pools of capital including private equity, venture capital, public equity, high-yield assets and mezzanine capital with approximately $67 billion in assets under management. Since its inception in 1984, Bain Capital has made private equity investments and add-on acquisitions in over 450 companies in a variety of industries around the world. Bain Capital Ventures (www.baincapitalventures.com) manages over $2 billion of assets and has over 70 active portfolio companies. Bain has a long history of investing in branded technology and business service companies, such as Solarwinds (NYSE: SWI), AppAssure Software, Archer Technologies, Network Intelligence, dynaTrace Software, LinkedIn (NYSE: LNKD), SurveyMonkey, Taleo, and DoubleClick. The firm has offices in Boston, Palo Alto, New York, Chicago, London, Munich, Tokyo, Shanghai, Hong Kong and Mumbai.

Daily Links 1/15/2013: Curalate raises $3 million ; First Round invests in Invite Media founders' Health IT startup

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Pinterest Analytics Service Curalate Raises $3M
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Bain Capital invests $150 million in Wilmington-based SevOne

Tom Paine

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I thought Wilmington-based SevOne might be on to something big. It is.

Today the network performance monitoring company announced it was receiving a $150 million investment from Bain Capital, following a year in which SevOne said "bookings doubled year over year, profitability increased significantly and our customer base doubled."

SevOne is one of those companies that may have invented the proverbial "better box". In a world increasingly dependent on big data, distributed networks and cloud computing, the company's "SevOne Cluster" architecture helps customers monitor network performance at a detailed level on a dynamic, real time basis. SevOne's IT Performance Appliances scale to the size of any network, and its peer-to-peer architecture means that each node in the network can communicate with the other nodes. Comcast was an early and important SevOne customer.

SevOne CEO Mike Phelan

“We want to pursue the public markets,” CEO Mike Phelan told TechCrunch, presumably meaning the company is looking towards an IPO. He said that SevOne plans to use the funds to expand internationally, into the Goverment market and also to reach more middle market customers. Most of its early customers have been very large.

SevOne was founded in 2005 and currently has about 140 employees, but "will scale to several hundred by the end of the year," Phelan told TechCrunch.

SevOne has only raised a reported $3.5 million prior to this round. Osage Ventures has been the only institutional investor, leading a Series A in 2007 and a subsequent round in 2009. Other investors include a private group led by CEO Phelan, who prior to co-founding SevOne founded StorNet, which he built into a leading national storage consulting firm; Jonathan Brassington, the CEO and Founding Partner of Liquid Hub; and John Ryan, founder of SunGard Data Systems and a private investor.

I had SevOne ranked 4th among Philly Tech News' "Young Companies To Watch", but will probably move it up a few notches based on this. I would guess early investors received a good valuation since they got to this point with so little capital invested. Its a huge win for Delaware, assuming they stay there.




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Comcast to buy stake in Arris with close of Arris acquisition of Motorola Home from Google

Tom Paine

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Arris Group announced today that Comcast will purchase $150 million in Arris Group stock, shares that previously were to be sold to Google as part of its $2.35 billion sale of Motorola Home to Arris announced late last month. The result would have Comcast owning 7.85% of Arris, roughly the same percentage Google will own post-close.

Comcast is one of Arris' largest customers (the largest, I believe), as it is one of Horsham-based Motorola Home's largest.

While certainly not a huge investment by Comcast standards, the deal may reflect some interest by Comcast to be more actively involved in owning and developing proprietary cable technology.

Comcast's investment is contingent on the Arris-Motorola deal closing.



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Daily Links 1/14/2013: Dell said to be talking about buyout with PE firms

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Seven More Questions for SAP’s Co-CEO Bill McDermott (All Things D)

News Analysis: SAP Business Suite on HANA (Ray Wang/A Software Insider's Point of View)

Marin County settles legal claims against Deloitte, SAP over software project
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Dell Said to Be in Buyout Talks With Private-Equity Firms (Bloomberg)

Dell Shares Surge After Report of Possible Buyout (New York Times: DealBook)

Edison says it did well on WAM deal, not much more about it (Philadelphia Business Journal)

Weidenhammer Merges With 4O1! Creative (Marketwire)



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NJEN Panel Discusses “Where’s the Money?” Alternative Financing for Tech Companies, Part 1

Esther Surden
Publisher & Editor, NJTechWeekly.com

(NJTechWeekly.com is continuing to catch up on pre-Sandy coverage that would have been published in early November but was postponed because of post-storm chaos and the volume of Sandy-related stories. We apologize for the delay.)

The New Jersey tech community knows how difficult it was for companies to get VCs and angels to write checks in 2012. Acknowledging this, the New Jersey Entrepreneurial Network (NJEN) organized a panel discussion on alternative means for entrepreneurs and businesses to obtain financing.

Some 60 attendees at the Oct. 10, 2012, event, held in Princeton, heard about crowdfunding, bank funding, myriad financing tools made available by the state of N.J. and even a vehicle that gives immigrants green cards while providing financing to companies that create jobs.

Part 1 of this post covers the crowdfunding presentations, including an interesting discussion by Savraj Singh Dhanjal, a Princeton entrepreneur who gave a Kickstarter campaign a try.

The first speaker was Freeman White, CEO and cofounder of Launcht (Buckingham, Pa.), a website providing custom crowdfunding platforms and white-label sites for nonprofit social fundraising, online voting and use by universities.

White spoke about the history of crowdfunding, including the difference between the form of it authorized by the Jumpstart Our Business Startups (JOBS) Act and the version of it carried out today via Kickstarter, Indiegogo and other sites. For entrepreneurs, today’s sites are used to build something of interest to the market and then presell it, White said. “However, if you want to invest in the business itself, that is still illegal, unless you are an angel investor or an accredited investor through a Rule 506 offering or a Regulation D offering,” he noted.

When the rules are finally promulgated, the JOBS Act will change things so that ordinary people can invest upwards of 5-10 percent of their income in startups and small private companies, White said. The investment can take many forms, such as revenue sharing, equity, debt and any kind of regulated security, he added.

However, “if you see anyone offering you a crowdfunded security today, they are trying to defraud you of your money,” White told the group. When the rules are finalized, it will be ethical to invest this way, and “you are going to know when that is, because the Securities and Exchange Commission and the Financial Industry Regulatory Authority are going to shout it from the rooftops!”

There is a role for crowdfunding right now. Current sites can be used for product development, for example. They basically let companies that want to design a product’s first run do so, if they have the design and suppliers, White said. Companies are essentially preselling “cool gadgets.” This kind of selling is based on how commerce is already being carried out, as in the case of preselling books.

Another interesting use for today’s crowdfunding sites is tech transfer for universities, White said. Universities are setting up campus crowdfunding portals and offering research projects to be funded, or they present a product ready for commercialization, requesting funding to make a first run at the market. With this model, crowdfunding becomes market research; you learn very early on whether someone will buy the product, he noted.

Dhanjal, CEO of the startup Wattvision, which ran a successful Kickstarter campaign this year, was the next speaker to tell his story. A Princeton graduate, he had an idea in 2008 for a gadget that would record how much energy a home or business was using at any given moment. He made a prototype of his product and tested it in his parents’ house. A neighbor saw it and wanted it, and Dhanjal thought he had a business.

In 2009 he was able to raise money with the help of Y Combinator (Mountain View, Ca.) founder Paul Graham. “I pitched him, and he realized this was a cool energy monitoring system that was really simple and didn’t involve electricians,” explained Dhanjal. Graham liked the idea because it incorporated both hardware and software, “and most people only do one or the other.

“This was after I had spoken to angels in the Princeton area. At that time there were no local accelerators. So I moved to California for three months, refined the prototype a bit and raised more money from angels. … We spent ... time turning a standalone device into a tiny box that connects to the wireless network in the house and a sensor that you put on your meter.

“There are three ways to raise money from VC firms. The first is if you are a cofounder at something like Facebook. If you’ve already achieved a lot of success, you can probably raise money from a VC. Another way is to have something so cool and amazing that everyone will want one. If it’s low-cost enough, you can raise money for that. The third way is to have traction [ongoing revenue generation, users and success in the market].

“Angels have the same three requirements, but they may be personally vested in your product and you can connect with them,” he said.

Dhanjal was able to produce and sell the first version of his gadget, which he named Wattvision. When it was time to produce an updated version, however, the company needed to raise more funds. “We saw another Y Combinator company that made watches, Pebble put its [smart] watch up on Kickstarter and be wildly successful,” he said.

With Kickstarter, if you can convey your product as cool or interesting, you can connect with that audience, Dhanjal noted.

“This was a risk for us. We had already taken angel funding, and we already had a product out there. We didn’t know how we would be received on Kickstarter. Also, we were selling our product to homeowners — someone who has a house, not someone in a New York apartment who wants a cool watch.” Dhanjal said the company thought long and hard about how to frame the product in a light that would inspire people to pre-order it.

“We put up our campaign in late August. Our goal was $50,000 for version 2 of Wattvision. We had a local filmmaker make a marketing video.” Dhanjal said being located in the Tigerlabs (Princeton)coworking space was an advantage for the firm, because others working there helped out, lending scenery to make the video “cool.”

“We made the video and we waited,” he said.

That’s not all the company did.

“We emailed our existing user base. We had had some great press in 2009. Forbes and Business Week covered us, and we collected the email addresses of users interested in the product.”

In the email it sent them, Wattvision offered existing users a better deal: if they preordered , they would receive the next version of the device at a discounted price. Other Kickstarter users had to contribute a higher amount to preorder. “Thanks to our own email list, we raised $18,000 in 24 hours, which was exciting,” noted Dhanjal. The campaign raised $67,000 in total.

There are some things to note about Kickstarter, Dhanjal said. The site takes 5 percent off what you raise, and 2 percent goes to credit card processing. So people considering using it should do the math. Also, you have to have a physical product. Finally, Kickstarter reviews products, so yours can be rejected.

Esther Surden is Publisher and Editor of NJTechWeekly, and a contributor to Philly Tech News. This article originally appeared in NJTechWeekly, and was reposted here with her approval.



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Events this week: Cloudforce Essentials comes to Philly tomorow (1/15) ; PhillyForce Meetup follows

Tom Paine

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Cloudforce Essentials Philadelphia, a locally oriented version of the Salesforce.com expo, will be held on Tuesday, January 15 at the Hyatt at The Bellevue from 9 am to 2 pm. You can register for the event here.

Its an excellent opportunity to catch up on the latest news from Salesforce.com, meet with local vendors and clients, and see demos from Salesforce.com partners. There will be a keynote on the future of cloud computing and the socially connected enterprise with Salesforce.com leaders, and you will hear how area companies such as Comcast and IMS Health are using Salesforce.com.

Following the event, local Force.com developer group PhillyForce will hold a meetup at 1:30 at McGillin's Olde Ale House on Drury Street in Philadelphia. Salesforce.com Developer Evangelist Reid Carlberg will be there to discuss how developers can use new AppExhange features to monetize their Force.com apps.

"As Salesforce.com continues to expand their platform offerings and ecosystem, this is a great opportunity for our diverse Philadelphia developer community to see the latest Force.com and Heroku technology," said Matthew Botos, Force.com MVP and co-organizer of the PhillyForce group.

Also, tonight (Monday the 14th) from 6 to 8pm cloud technology companies and Salesforce partners Concur and Summa will hold a Cloudforce networking happy hour at Ladder 15 on Sansom Street.

Also worth checking out is a new group that's been getting off the ground, the Philly Enterprise Software Meetup, scheduled for tomorrow evening at 6:30 at Seed Philly. Chris Erb, an attorney with the Erb Law Firm, will discuss the legal environment of Enterprise SaaS solutions.

Another big event this week is the grand opening party for the new, much larger NextFab Studio on Washington Avenue. It will begin 6pm on Thursday the 17th.




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Princeton GPS company (ALK Technolgies) bought by Trimble (Times of Trenton)

Recalling the tech scene back when you were in diapers (Peter Key/Philadelphia Business Journal)

Philly Tech People News 1/13/2013

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Waz Returns to Full-Time Comcast Public Policy Post
Will be based in Los Angeles and Washington (Broadcasting & Cable)

QlikTech Appoints Mark From-Poulsen as Senior Vice President of Global Services
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Janney Capital Markets Appoints Gregory Voetsch as Head of Equities (Business Wire)

SciStrategy Communications Launches 2013 with New Vice President, Strategic Growth and Development (Business Wire)

TMG Health Names Deanna Forte Lahey Vice President of Professional Services (PR Newswire)




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Updating & expanding Philly Tech News "Young Companies to Watch"; Seeking input

Tom Paine

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Young

Companies

To Watch


On an ongoing basis, I track promising, privately owned information technology oriented startups in the Philly area, and using a combination of subjective judgement and whatever bits of objective data I can dig up, I maintain a list of the top thirty ("Philly Tech News Young Companies To Watch") in terms of their estimated market value. Unlike other rankings, "Young Companies To Watch" is not driven primarily by revenue, since the quality and value of revenue streams vary greatly from one company to another. These rankings are only intended as rough indicators, since as I said the data on most privately held companies is sparse and perceptions of value can differ widely. Generally, though, I've found the top thirty to be a fairly good indicator, based on what some companies are eventually acquired for or valued at in a financing transaction (or in a few cases what they are valued at in a public offering although there haven't been many tech IPOS out of the Philly area lately.)

But given what appears to be a deepening talent pool in the Philadelphia area, I plan to expand "Young Companies to Watch" to at least 35 and probably to 40 companies. And I'm looking for input from the Philly Tech community.

The general qualifications are:

• The company must be officially headquartered or co-headquartered in the Philly area (including surrounding PA, NJ, and Delaware suburbs), and privately owned or not majority owned by a publicly traded coporation. 
• Information technology must be the driving force behind its offerings. It doesn't have to be a software company, but proprietary information technology must be essential to how the product is delivered.
• Companies offering products are generally favored for inclusion over consulting firms or agencies (but not absolutely)
• I'm usually looking for firms started within the last decade, although that's also not an absolute rule. For example, some companies may have been around for some time in one form but reconstitute themselves in another higher-growth  form.

You can submit the name of your startup or someone elses' and any supporting metrics you might be willing to share to phillytechnews@gmail.com (confidentially is assured). I may get back to you if I have any more questions. No metrics are required and obviously whatever you share is up to you, but information on customers, headcount, invested capital, revenue, profitability and growth are useful, as well as any major partnerships/joint ventures, or examples of industry recognition. I'll include your company on a published list of all companies that are nominated, even if it doesn't make the "Young Companies To Watch" primary rankings. By nominating your company, you'll also get it on my radar for possible future coverage if I'm not already familiar with it.

If your company is already on "Young Companies To Watch", feel free to provide more information indicating why it could be ranked higher.

I'll leave the submission process open for three weeks, or until February 2.

Thanks for your help.




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Saturday Highlights 1/12/2012: On SAP sales reorg; Comcast dividend hike expected

Will Oracle’s customer base migrate to SAP Business Suite on HANA?
The analyst community believes SAP has made a strong play for the database market (Computerworld UK)

SAP Reorganizes Global Sales, Reshuffles N.A. Leadership Again (ASUG News)


Comcast Dividend Hike Forecast In Range of 20%-30% (Investor's Business Daily)

Cops Now Pinning Mugshots to Pinterest Because the Police Can Be Aspirational Too (Betabeat)
Pottstown & Philadelphia among users.




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