Anatomy of an Exit: Reflecting on StrikeIron’s Success
Ascent portfolio company StrikeIron was acquired by Informatica last month in what was a rewarding and positive outcome for all. Having worked closely with the company over the past seven years, I’d like to share my perspective on what the company accomplished over that period, and why it became an attractive target for acquisition.
Based outside Durham, NC, StrikeIron had an early vision for how data would be shared via web services and incorporated into live web applications. The company raised its first round of capital from local investors in 2005 and 2006 and when we met StrikeIron, the company had about 15 people producing roughly $750K in annualized revenue. The StrikeIron vision resonated with us and we found some compelling use cases even within our own portfolio companies during diligence. We led a fresh round of financing in 2007, with participation from the local investors.
The existing team was strong on vision and technology, but had limited sales and marketing experience. We worked to add strength in those areas, but encountered challenges finding the right leadership. The company was making progress but it was far too slow. A serious debate developed at the board level around the state of the market and the right next move.
It took time, but we persisted on our plan to strengthen the marketing and sales side of the business. We recruited two experienced technology executives to the board and then new CEO Sean O’Leary in April 2010. Sean brought extensive sales acumen developed in leadership roles at Cabletron, Cisco, Good Technology and TapRoot. His leadership style was infectious and he was able to recruit other strong talent to the company while retaining the key contributors.
With the team in place, the company started to better execute on the vision and accelerate growth. The data-as-a-service products were bundled together for specific verticals and targeted at increasingly larger customers. StrikeIron’s platform started to experience more than a million daily data requests, or “transactions,” fairly regularly. As the business and technology world increasingly started to share StrikeIron’s vision for the need to stream live, accurate data into all kinds of applications, the management team and the board invested in productizing the core platform, named IronCloud, so that other companies could make quality data available to their customers, partners, and employees. They also could track usage, as well as perform metering and monitoring of the data. It was API management, but it was also a lot more.
The company’s pace of progress continued to increase and in 2013, as the new IronCloud platform was formally launched in the market and the usage of data services in areas such as CRM and e-commerce expanded. StrikeIron became an attractive acquisition target among a number of large public software companies. Sean navigated the competitive process extremely well, and Informatica emerged as the victor. The acquisition closed in June and the StrikeIron team now joins forces with an industry leader.
The move by Informatica should come as no surprise to industry observers. Informatica’s Intelligent Data Platform (IDP) is all about feeding applications with accurate, live, reliable data. “The acquisition of StrikeIron helps bring focus to this vision in two ways. It extends Informatica’s offerings to improve the quality of customer data – critical for SaaS integrations, among others – and considerably shortens the company’s time to market with advanced API capabilities for the data-as-a-service (DaaS) and integration PaaS (iPaaS) markets,” according to Carl Lehman, Research Manager at 451 Research.
I want to take this opportunity to congratulate and thank Sean O’Leary and his very capable team and staff. Their vision, hard work and execution built an attractive, growing company that had a number of compelling options in front of it as we started 2014. The acquisition by Informatica marks the end of Ascent’s involvement in StrikeIron, but by no means the end of the vision or the momentum the company has built. If anything, we expect growth to accelerate further, given the resources and market presence of the new owner.
It is also important to step back and remind ourselves that for a time in 2008 and 2009, the probability of success was very much in question. Yet persistence and determination paid off. We battled through a period of slow growth and serious doubts, rejecting the notion that we could not improve our chances. Once the right people were assembled, the company transformed into a sales machine with real momentum and attractive options.
We look forward to future opportunities to work with Sean and his team.
Well done and well deserved.