Elastic files S-1 to go public

Elastic was founded in
2012 by Simon Willnauer, Steven Schuurman, Uri Boness and Shay
Banon.
Elastic

• 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. 

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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.