- Elastic, a Dutch search software company founded in 2012, filed to go public on Wednesday.
- Elastic was last valued at $700 million in a funding round in 2014, though Recode reported in June that it’s seeking a valuation of $1.5 billion to $3 billion in its IPO.
- The software company is mostly open source, but it makes its money selling proprietary software which is used by companies like Uber and Tinder to run search in their apps.
The Dutch search company Elastic filed to go public on Wednesday, more than two months after the startup reportedly filed its paperwork confidentially. Elastic plans to list on the New York Stock Exchange under the ticker symbol “ESTC.”
Since its founding in 2012, Elastic – previously called Elasticsearch – has raised a total of $104 million from investors at Benchmark Capital, Index Ventures and New Enterprise Associates, all prominent Silicon Valley venture firms. The company was last valued at $700 million in 2014.
The company didn’t disclose its share price in its filing Wednesday, but Recode previously reported at the time of the confidential filing that Elastic seeking a valuation between $1.5 billion and $3 billion.
Elastic describes itself as a “search company.”
“Search is foundational to a wide variety of experiences. Elastic makes the power of search-the ability to instantly find relevant information and insights from large amounts of data-available for a diverse set of applications and use cases,” it wrote in the S-1.
Its software is used by other companies like Uber, Tinder, Walgreens and Adobe to sift through incredible amounts of data. But Elastic says that it’s more than just a search engine – it’s also a player in the growing market for the growing market for AI-powered algorithms.
“Dragging your finger across a map on a smartphone screen is search. Zooming into a specific time frame in a histogram is search. Mining log files for errors is search. Forecasting storage capacity two weeks into the future is search. Using natural language processing to analyze user sentiment is search,” reads the filing.
Aligned with its peers in the IPO space, Elastic still isn’t profitable. The company saw net losses of $52 million and $52 .7 million in its 2017 and 2018 fiscal years, respectively. This is in part because of its open-source model, where it offers a core product to developers for free, spreads primarily through word-of-mouth, and then upcharges for certain premium products and features.
Despite the losses, the company’s revenues, composed primarily of subscriptions to its service, are growing fast.
Revenues were up 81% between fiscal 2017 and 2018 – up from $88.2 million to $159.9 million. Its paying customers grew from 2,800 in April 2017 to 5,500 in July 2018.