Here’s why some Pendo investors and employees sold $110 million worth of company stock
Pendo, one of the Triangle’s hottest startups, could be on the verge of filing for an initial public offering next year.
But some employees and investors in the software startup have decided to cash out early, selling some $110 million worth of shares to Thoma Bravo, an investment firm that specializes in software.
The sale came at Pendo’s most recent valuation of $2.6 billion, which it reached after raising $150 million from investors earlier this year.
It will also give employees and some early investors a chance to earn profits that, before today, were only on paper.
Todd Olson, CEO of Pendo, said the secondary sale was motivated by two things: rewarding longtime employees and gaining another influential investor that could help it meet more customers.
“We’re an 8-year-old company now, and I think what you’re finding is companies like ours are staying private longer,” Olson said in a telephone interview with The News & Observer. “I think there’s value in creating opportunities for early employees to get liquidity, keep them fueled and incentivized to keep moving forward.”
The company did not share which investors or employees sold shares to Thoma Bravo.
Pendo, the maker of software that helps companies collect data on how customers actually use their products and websites, said earlier this year it hit a milestone of $100 million in annual recurring revenue, a figure that tracks how its subscription-based business is doing.
That success also means other companies are eyeing its senior employees.
“We’re starting to compete in this region with companies like Amazon, Google and Facebook and everyone else,” Olson said. “I think creating liquidity is a way to help counteract some of the competitive pressures we’re seeing in the hiring market.”
Olson said the sale will not change any of its thinking around when it will file for an IPO.
The company has 675 employees worldwide, with offices in Raleigh, San Francisco, the U.K. and Israel, a spokeswoman told the N&O earlier this year. The company has said previously that it plans to employ nearly 600 people in Raleigh by 2023, after it landed jobs incentives from the state in 2018.
Most recently, the company’s name now rests on the skyline of downtown Raleigh, after it was added to the company’s soon-to-be home at the under-construction Raleigh Crossing Tower.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate.
This story was originally published November 13, 2021 at 7:30 AM with the headline "Here’s why some Pendo investors and employees sold $110 million worth of company stock."