‘It Is Tremendously Satisfying:’ Sumo Logic Stock Soars Upon Going Public
‘I’m very happy we managed to execute on our vision. Hundreds and hundreds of people have worked very hard to get us here, and they deserve this success,’ says Sumo Logic co-founder and CTO Christian Beedgen.
Sumo Logic plans to use money from its initial public offering to embark on a hiring spree and expand its footprint outside the United States.
The Redwood City, Calif.-based SaaS machine data analytics company saw its stock surge $4.88 (22.2 percent) to $26.88 Thursday in its first day of trading on the Nasdaq Global Select Market. Sumo Logic had priced its initial public offering of 14.8 million shares at $22 each, putting the company on track to raise $325.6 million with a likely valuation of $2.17 billion.
“It is tremendously satisfying because it validates the original hypothesis we have,” said Sumo Logic Chief Technology Officer Christian Beedgen, who co-founded the company in 2010. “People told us we were crazy back then, but we stuck to our principles because we thought it was a better way to do things.”
Sumo Logic has built a solid business in the United States and has really focused on earning the trust of American customers by demonstrating the company’s ability to comply with stringent regulations, Beedgen said. But much of the company’s future growth is positioned to come internationally, which only accounted for 17 percent of revenue in the quarter ended April 30, according to regulatory filings.
The company also enjoyed early success selling its continuously intelligence platform to banks in Australia, which Beedgen said tend to be more forward-thinking. But there are still additional hurdles around getting businesses in Europe, the Middle East and Africa (EMEA) to trust cloud and SaaS providers like Sumo Logic with their data, according to Beedgen.
“We’re only getting started internationally,” Beedgen said.
Sumo Logic plans to invest in certifications and other tools that will help the company earn the trust of European prospects, Beedgen said. And from a channel perspective, Beedgen said Sumo Logic is looking to have a broader and deeper presence in more geographies, which has prompted the company to beef up its staffing in emerging markets to support local go-to-market, training and back-office operations.
Beedgen expects the IPO to unlock access to markets and channels that didn’t want to take a chance on a vendor that was still perceived to be a startup. Thanks to the visibility provided by an IPO, Beedgen said Sumo Logic should have an easier time bringing its vertical-specific expertise to prospects and getting them to demo the company’s platform in a hands-on environment.
“Yesterday we were a startup,” Beedgen said. “Now, we’re a publicly-traded company.”
As far as personnel is concerned, Beedgen said Sumo Logic plans to continuing invest in its already large product development team and go-to-market operation. The general, administrative and marketing teams are typically smaller, but Beedgen said they matter tremendously to Sumo Logic as well since those functions bind the entire organization together.
And from a technology standpoint, Beedgen said Sumo Logic will continue to invest in its underlying machine data platform, over which the company has observability and security offerings. Although analytics were the obvious initial application of Sumo Logic’s platform, Beedgen said it gained traction with security practitioners early on.
As Sumo Logic matured, Beedgen said the company doubled down on security, purchasing FactorChain in January 2018 to build out the company’s version of a cloud SIEM (Security Information and Event Management) platform and cybersecurity intelligence vendor Jask Labs for $55.1 million in October 2019 to better protect modern applications, architectures and multi-cloud infrastructures.
“I’m very happy we managed to execute on our vision,” Beedgen said. “Hundreds and hundreds of people have worked very hard to get us here, and they deserve this success.”