AppDynamics raises $50 million Series D

App performance management service to continue global expansion, increase R&D and accelerate hiring

Financial trends and news by Steven Loeb
January 23, 2013
Short URL: http://vator.tv/n/2d13

(Updated to reflect comment from AppDynamics)

As apps continue to rise in popularity, and more of them pop up every day, it stands to reason that many big name companies will need someone to make sure they are running smoothly. Many companies are turing to application management companies to assure that they improve the customer experience and avoid any downtime to solve application problems.

One such service, app performance management company AppDynamics, has raised a $50 million Series D growth financing round, it was announced Wednesday. 

The round was led by new investor Institutional Venture Partners (IVP), and also included AppDynamics' current investors Greylock Partners, Kleiner Perkins Caufield & Byers, and Lightspeed Venture Partners.

In January 2012, AppDynamics raised a $20 million Series C from Kleiner Perkins Caufield & Byers, with articipation from previous investors Greylock Partners and Lightspeed Venture Partners. The company has now raised a total of $86.5 million.

The new money will go toward supporting AppDynamics' expansion into the global enterprise market.

It will also increase investment in research and development by expanding the application stacks it supports.

"For example, right now we support Java/.NET applications, but we will soon be supporting PHP as well. We will be adding other enhancements and functionality as well," Jyoti Bansal, Founder & CEO of AppDynamics, told VatorNews.

accelerate hiring to meet demand for the AppDynamics Application Performance Management platform.

"We already have around 30% of our business coming from international resellers, but we are definitely putting more focus on EMEA this year and beginning to hire in that market," said Bansal.

The company will also be putting the money toward hiring new people. By the end of the year, the company expects to double its workforce to 400 employees, hiring workers in engineering, sales, and marketing.

AppDynamics is in the newly capitalized area of application management that addresses the shift in communication and commerce online where customers interacting with multiple computing systems for different transactions.

Essentially, AppDynamics runs diagnostics in online customer traffic to pinpoint where problems are building up or occurring so that they can be addressed before any major shutdown is necessary.

The example Bansal gave is Netflix, one of AppDynamics' customer. 

"An application helps power their web site. When you add a movie to your queue, it should take 3 milliseconds, not 5," he said. "We help IT ops and dev teams ensure those applications are performing correctly, and when there are problems, we help find root cause quickly."

AppDynamics customers include AMICA Insurance, Cornell University, Hotels.com, Insight Technologies, Priceline, StubHub, Staples, and TiVo.  The company currently monitors over 51 billion transactions per day among the customers of its Pro product, 

Founded in 2008, San Francisco-based AppDynamics has expanded to more than 200 employees worldwide with headquarters in San Francisco and offices in UK, France, and Germany. The company has grown 300% in the past year. it has 10,000 users and over 500 enterprise customers.

"We believe that enterprise software (which generally has a terrible reputation) shouldn't be shelfware; it should 'just work'," Bansal said.

The application managment space

One of the biggest competitors to AppDynamics in the app managment space is New Relic, a cloud-based performance tool software. New Relic announced in November that it pocketed $15 million in a Series D round of funding. The funding was led by new investors DAG Ventures and Four Rivers Group -- existing investors Allen & Company, Benchmark Capital Tenaya Capital and Trinity Ventures also participated. The company has received $34.5 million in funding to date.

The San Francisco-based New Relic has more than 30,000 active accounts. Its clients include Bleacher Report, Mashable, OpenFeint, Groupon, Nike, Warby Parker and HotelTonight.

What separates AppDynamics from its competitors, Bansal said, is that is focuses on enterprise companies.

"For example, one of our customers, Orbitz, uses us to monitor a very large environment (2,700 servers). What's unique is that they were up and running in a matter of days; most legacy enterprise solutions would take weeks to be property set up. Our ease-of-use, combined with our ability to function in such large and complex environments, is completely unique to us."

(Image source: http://www.appdynamics.com)

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