The CEO of a Silicon Valley unicorn thinks more technology companies are about to start going public after a relatively quiet period on the world’s stock markets.
Companies like Uber and Airbnb have managed to raise tens of billions of pounds on the private market thanks to well-funded venture capital and corporate investment firms.
But David Wadhwani, the new CEO of £1 billion enterprise software company AppDynamics, told Business Insider in London this week that he expects private funding to start drying up in 2016.
“We’ve gone through an anomalous phase where people are investing in revenue growth or revenue potential as opoosed to the fundamentals and how profitably you’re growing that revenue,” he said. “I think those days are passed.
“A lot of companies have been able to raise money in the private markets because the private markets didn’t correct like the public markets so it was a more efficient way to do it. Now I think what you’ll see in 2016 is that differential is going to be heavily challenged and a lot of these companies will have to go public to raise the money they need.”
AppDynamics, an application monitoring company founded in San Francisco in 2008, is planning an IPO [initial public offering] of its own at some point but Wadhwani refused to be drawn on when this will be.
“There’s no secret to the objective here,” said Wadhwani. “I was brought in to take the company public. But the mechanisms and structures need to be in place before we can do that.”
The startup, which has an office in London’s Moorgate and another in Bracknell, in Berkshire, helps businesses to monitor code within their applications. It’s been well backed by a number of big Silicon Valley investors, having already raised $150 million in venture capital funding from the likes of Kleiner Perkins and Battery Ventures.
It’s understood the company is about to raise another round that could see its funding doubled to $300 million.
Wadhwani, who joined AppDyamics just over a month ago after working for Adobe for 10 years, climbing to chief digital offcer in the process, said he wants to sign up more large enterprise clients to the AppDynamics customer portfolio, which already boasts more than 1,700 paying businesses.