Notes from the Zendesk S-1 IPO Filing

Zendesk, one of the hottest and fastest growing Software-as-a-Service (SaaS) companies just filed their S-1 to go public. Zendesk makes help desk software for support teams to interface with customers in an efficient manner. Zendesk started at the same time as Pardot back in 2007, so I have a sense of nostalgia watching our respective companies grow up at the same time as a class of second-generation SaaS companies providing broad-based solutions for a specific market.

Here are a few notes from the Zendesk S-1 IPO filing:

  • Over 40,000 customer accounts (pg. 1)
  • Zendesk approach (pg. 3)
    Beautifully Simple
    Omni-Channel and Contextual
    Affordable
    Natively Mobile
    Cloud-Based Architecture
    Open Platform
    Proactive Engagement
    Strategic Analytics
  • Revenue (pg. 9)
    2011 – $15.6M
    2012 – $38.2M
    2013 – $72M
  • Losses (pg. 9)
    2011 – $7.2M
    2012 – $24.4M
    2013 – $22.6M
  • 473 employees (pg. 13)
  • Has experienced several security breaches including one in February 2013 where three accounts were compromised and personal information was stolen (pg. 15)
  • Owes $23.8M on their line of credit (pg. 34)
  • Three things that successful businesses do well (pg. 42)
    – Have great products
    – Care for your customers
    – Attract a great team
  • Acquired Zopim, a live chat company, for the purchase price of approximately $15.9 million (pg. 69)
  • Equity ownership (pg. 119)
    Co-founder/CEO – 7.1%
    Co-founder/CPO – 7.2%
    Charles River Ventures – 24.5%
    Benchmark Capital – 18.7%
    Matrix Partners – 8.8%

Zendesk, with over $100 million in annual recurring revenue and an amazing growth rate, will do extremely well in the public markets. Ultimately, I expect Zendesk and HubSpot to merge in the future and take Salesforce.com head-on as the second-generation cloud platform of record for businesses.

What else? What are some other thoughts on the Zendesk IPO filing?

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