Cribl positions for IPO with $319M in latest funding round
The observability specialist's latest financing, along with strong recurring revenue and customer growth, helps set the vendor up to go public pending further financial milestones.
Cribl on Tuesday secured $319 million in venture capital funding, potentially setting the vendor up for an IPO.
The financing, Cribl's Series E round, brings the data management vendor's total funding to more than $600 million, including $209.8 million in 2021 and $150 million in 2022. In addition, the funding puts Cribl's total valuation at $3.5 billion, according to the vendor.
New investor GV Management Co. led the round. Michael McBride, a general partner at GV and former chief revenue officer at GitLab, joined Cribl's board of directors following closing. GIC, CapitalG, IVP and CRV also participated in the round.
The latest funding round follows four years of annual recurring revenue growth of 163% and triple-digit customer growth for five straight years, according to Cribl. Combined, the vendor's funding and financials put it on track for a potential initial public stock offering, according to Andy Thurai, an analyst at Constellation Research.
"I am not sure [Cribl is] ready for IPO yet, but that is the direction they are heading," he said.
Torsten Volk, an analyst at TechTarget's Enterprise Strategy Group, likewise noted that Cribl's financial growth combined with having reached its Series E funding round suggests that the vendor's next capital raise could be through an IPO.
And it could be a significant one.
"The IPO is the next logical step for Cribl," he said. "If they can sustain their revenue growth momentum, while capturing neighboring markets, they will achieve a massive valuation when going public."
Based in San Francisco, Cribl is a 2017 startup that specializes in observability of IT and security data.
Cribl Stream, the vendor's flagship platform, sits between the data ingestion and storage phases of a data pipeline and enables customers to observe and transform data. Additional offerings include Cribl Edge for logging data and Cribl Search for examining data before it's processed.
Clint Sharp
Former partner Splunk in 2022 accused Cribl of copyright and patent infringement. The result was a lengthy legal battle that ended in April 2024, when a jury found Cribl guilty, but awarded Splunk just $1. Cribl founders Clint Sharp, the vendor's CEO; Dritan Bitincka; and Ledion Bitincka all came from Splunk.
Cribl competitors include specialists such as Confluent, Cloudera and tech giants such as AWS, Google and Microsoft.
Bucking trends
Should Cribl plot an IPO in the near future, it would be going against recent history.
Tech IPOs, including data management and analytics vendors, weren't uncommon through 2021. In fact, data platform vendor Snowflake's 2020 IPO set a record for tech vendors by raising $3.4 billion. Meanwhile, vendors including MariaDB, Qlik, Pyramid Analytics, SAS and ThoughtSpot publicly expressed plans to explore going public, with Qlik going so far as to file initial paperwork with the U.S. Securities and Exchange Commission in January 2022 to begin the IPO process.
But then market conditions changed.
All three major stock market indexes -- the Dow Jones Industrial Average, Nasdaq composite and S&P 500 -- dropped at the start of 2022, with the tech-heavy Nasdaq falling off more than 25% into the spring. Tech giants AWS, Google and Microsoft all suffered steep declines in their stock prices, as did more specialized vendors such as Nvidia and MicroStrategy.
The indexes have since recovered, as have many individual stock prices. However, heading into 2024, the climate for IPOs remained worse than it was entering 2022, and most of the data management and analytics vendors that had expressed interest in going public remain private.
One exception is MariaDB, which went public in December 2022 at just over $4 per share, dipped below $1 per share the following May and is now hovering at just over $0.50 per share.
Should an IPO be Cribl's next foray into the capital markets, it would take time for all paperwork to be filed and due diligence to be done, which would give the receptiveness for IPOs further time to recover.
"We've been operating with the mindset of a pre-IPO company for a while, and are focused on growing efficiently and maintaining our leadership in the IT and security data space," said Abby Strong, Cribl's chief marketing officer. "Financial milestones, including [Tuesday's] funding, are exciting for us, but what really matters is delivering products and services that transform the lives of our users."
Before going public, Cribl's goal is to be cash-flow positive by the end of 2025, she continued.
"Going public is simply another step on our journey that we will consider when it makes sense," Strong said.
Should Cribl go public, it wouldn't be the first trend the vendor goes against.
Just as the IPO market evaporated in 2022, venture capital funding similarly tightened as the overall markets dipped, driven by fears of a recession, rising interest rates, inflation, the onset of war between Russia and Ukraine, and repeated supply chain disruptions.
This $319 million is a vote of confidence based on Cribl's ability to generate a lot of revenue faster than 99% of startups. This speaks to both Cribl's technology and their ability to position and continuously develop a product portfolio that companies want.
Torsten VolkAnalyst, Enterprise Strategy Group
Nine data vendors raised more than $100 million in 2021, including data streaming specialist Confluent's $828 million round in June of that year. In early 2022, four more raised more than $100 million.
In the two years since, only Databricks and a handful of others have been able to attract more than $100 million in any single funding round. Funding appears to finally be returning to the data sector in 2024, with database vendor Aerospike and analytics specialist Sigma Computing each raising more than $100 million, and others attracting smaller amounts.
Still, funding is not flowing as freely as it was before spring 2022. Cribl's $319 million funding round, therefore, demonstrates that investors are bullish on the vendor's future, according to Volk.
"This $319 million is a vote of confidence based on Cribl's ability to generate a lot of revenue faster than 99% of startups," he said. "This speaks to both Cribl's technology and their ability to position and continuously develop a product portfolio that companies want."
Cribl's Strong similarly said the vendor's Series E round represents an affirmation of Cribl's technology and future growth potential. By focusing on IT and security, Cribl is addressing a need that has resulted in significant revenue.
"We've built a strong foundation by focusing on solving ... pressing problems in IT and security," she said. "That's resonating with investors. In an environment where funding is tough, our approach -- tackling meaningful, unsolved issues -- has given us an edge."
Investment plans
While Cribl's latest funding round helps put it in position for an eventual IPO, the vendor has more immediate plans for the cash.
Cribl's plans include accelerating product development, expanding its global presence and investing in its infrastructure to support that expansion.
Regarding product development, real-time query and analysis is one focal point, according to Strong. Another is making Cribl's tools more composable so that customers can choose which capabilities fit their needs and develop their own deployments. Still another is adding new partnerships and integrations to broaden the vendor's ecosystem.
Thurai noted that the end of the Splunk lawsuit seemingly freed Cribl to make aggressive moves. Since May, the vendor has unveiled a series of new partnerships, introduced new capabilities and now added substantial funding.
"For the longest time, they had a dark cloud hanging over their head," Thurai said. "[Now] they are firing on all cylinders. ... Given the dark cloud [has been] lifted, they could go big and make some news."
News such as an acquisition, Volk suggested.
He noted that Cribl has already proven its financial prowess by becoming one of the fastest companies ever to reach $100 million in annual recurring revenue. Expansion into new markets such as application and infrastructure observability and data observability makes sense. One quick means of expansion is to buy another company.
"Now they are in the position of making strategic investments to capture neighboring markets, most likely through acquisition," Volk said. "They could make an acquisition that not only opens up new revenue streams, but also lends Cribl some credibility in the open source community."
AI could be another area of investment, he continued.
While many data vendors have invested heavily in developing generative AI applications that simplify the use of their tools, and added other capabilities designed to help customers develop their own generative AI applications, Cribl has largely stuck to more traditional product development.
In June, the vendor unveiled Cribl Copilot, an AI-powered assistant -- but unlike other data vendors, such as Alteryx and Informatica, the company has not infused AI throughout its platform. Anomaly and trend detection could be ways for Cribl to add more AI, according to Volk. So could developing a recommendation engine and automation capabilities that enable users to create efficient data pipelines for generative AI models.
"In addition to strategic acquisitions, Cribl could use its funds to build out a strong AI team," Volk said.
Eric Avidon is a senior news writer for TechTarget Editorial and a journalist with more than 25 years of experience. He covers analytics and data management.
Clint Sharp
