Search software company Elastic has filed paperwork for an initial public offering, betting on continuing investor enthusiasm for the enterprise SaaS sector.
Elastic’s flagship software, an open-source tool called Elasticsearch, allows users to scan massive documents, data sets and visualizations. Customers include Dell, Netflix, Uber, Adobe, and The New York Times.
According to the company’s prospectus, its addressable market — including search systems, content analytics, and cognitive/AI software platform — has grown from $3 billion in 2012 to an estimated $45 billion in 2018.
“In the future, we expect our users to continue to apply our technology in new ways, helping us create more innovative products, features, and solutions,” the prospectus says. “As a result, we expect our total addressable market to continue to expand.”
Elastic was founded by Israeli-born Shay Banon in 2012 and has raised about $100 million in venture capital funding. During the last round in 2014, it was valued at $700 million.
According to Recode, the company “is expected to aim for a valuation between about $1.5 billion and $3 billion once it hits Wall Street.”
As of July 31, 2018, Elastic had more than over 5,500 customers across more than 80 countries. “When you hail a ride home from work with Uber, Elastic helps power the systems that locate nearby riders and drivers,” the company said. “When you shop online at Walgreens, Elastic helps power finding the right products to add to your cart.
Revenue was $159.9 million and $88.2 million in fiscal 2018 and 2017, respectively, representing growth of 81%, and it reported a net loss of $18.5 million in the second quarter of 2018. Subscriptions accounted for 93% of total revenue this year.
“Amazon competes with us for potential customers, and while Amazon cannot provide our proprietary software, the pricing of Amazon’s offerings may limit our ability to adjust the price of our products,” Elastic said.
As TechCrunch reports, a flurry of business software companies has gone public this year, with analytics company Domo raising $193 million. Other successful SaaS IPOs have included subscription biller Zuora, DocuSign, and Smartsheet.