Harness Lab is not founder Jyoti Bansal’s first startup. He sold AppDynamics to Cisco for $3.7 billion in 2017, the week it was supposed to go public. His last adventure has raised 425 million dollarsaccording to Crunchbase.
On Tuesday, Harness announced $150 million in debt financing, essentially a line of credit that the company can draw on as needed. It could be the last private financial step before an eventual IPO. It is worth noting that the company accepted another round of debt financing of $55 million in 2022.
Harness has created a comprehensive toolset for software development teams that includes a CI/CD pipeline, a code repository, a developer portal, and infrastructure such as code support, among other things. The company hinted that it will use the funding to build or purchase other parts for the tool set.
Bansal says they were looking at different ways to raise money and saw debt financing as a way for healthy public companies to access additional capital. “We’ve been looking at what’s the best way to raise capital, and if you look at a public company, most public companies have access to debt, and that’s what they would raise as a very healthy business,” Bansal told TechCrunch. .
He also says it’s an efficient way to raise capital because they don’t have to give up any capital; This could be a good final climb before the next logical step. “We believe we can take this loan all the way to an IPO. We don’t need any to raise more capital. Who knows, we may end up doing it, but it is not necessary and we can go from here to an IPO without additional investment,” he stated.
The business appears well prepared for the next big step: it surpassed $100 million in ARR last year, a sign that the company is sustainable and in it for the long term. Bansal says revenue has continued to accelerate beyond that milestone.
The company recently hired a chief revenue officer and has a chief financial officer — all signs that the company is considering an IPO.
Bansal has set three criteria for success: Harness Labs wants substantial revenue, accelerating well beyond the $100 million it reached last year; you want to be efficient because Wall Street demands it now; and wants to have high growth. If Bansal continues to run the business with those three goals, he believes that will eventually lead to going public.
“An IPO is just a milestone in operating as a company. It’s not that the IPO is a way out. “It is the first step to becoming a public company,” he stated. “So when the doors are open and we’re ready, we just want to be in the right financial position, for our business to be strong and have all the right elements.”
And for Bansal, who sold his previous startup just before going public, being a director of a public company is something he aspires to. “That’s the next challenge, which I’m excited about,” he said.
The $150 million debt facility comes from Silicon Valley Bank and Hercules Capital, Inc.