Jyoti Bansal, co-founder and CEO of Startup Harness.
Harness
Jyoti Bansal knows about the strange acquisition.
Eight years ago, his software company AppDynamics was at the gateway to early public offerings for blockbusters. One day before the offer, Cisco It swooped down and bought the company for $3.7 billion.
Now, Bansal is at the heart of an equally unconventional combination.
Since 2020, Bangsal has run two startups as co-founder and CEO. Harness and traceable. The former technology helps businesses manage their code, while the latter software observes where companies unintentionally release sensitive data.
The harness and traceable will merge later this month or earlier. The resulting company has 1,100 employees, an expected annual revenue of $250 million in 2025, a 50% growth rate and a valuation of about $5 billion.
“It’s about the same size as when Appdynamics was about to publish,” Bansal told CNBC in an interview last week.
Bansal said Harness will be able to sell more products to customers, and Traceable will be better insulated from competitors like Hashicorp. IBM I agreed to buy AkamaiLast year, I acquired security startup Noname.
This time, Bangsal wants an active stock ticker.
In an interview with CNBC’s Make It last year, Bansal said he didn’t finish what he started after selling Appdynamics.
“Everyone told me, ‘You should retire. Go to the beach. What else do you need to do?” said Bansal. “That was also my first instinct: I wanted to trek in the Himalayas, hike Machu Picchu, do safaris in Africa, see Norwegian fjords. In six months, my bucket list was completed. That’s not the case for me.”
Bansal returned to work and founded Big Labs, a studio for exploring startup ideas. Big Labs produced the harness in 2017 and was then traceable in 2020. Other co-founder of Traceable, Sanjay Nagaraj, recalled working on a security startup in a large dedicated lab room at Harness’s San Francisco headquarters.
The arrangement was unorthodox.
“We’ve been working hard to get into the work of our team,” said Steve Harrick, who joined Institutional Venture Partners in 2001 and sat on the board of directors of Harness and Traceable. “But Jyoti is so good. He’s not only a great executive, but he’s also often hired and delegated. So I spoke to Jyoti. “This is a huge risk.” Ta. I got his assurance that he wouldn’t do the third one. ”
Establishing harnesses and what can be traced as separate companies made sense to renters back then, as products are usually sold to various buyers within the organization. But that has changed over the past year or two as engineering and technology leaders have also begun to make decisions about procurement tools to protect code and data.
He said employees noticed the shift and repeatedly asked Bansal about the integration during all hand meetings at both companies. The questions came from the client as well.
“The harness team sets up meetings with executives at the bank or part of the client,” Bansal said. “I’m at the meeting and the executive says, ‘It’s an hour’s meeting. Can I save the last 15 minutes? Because I want to talk about things that can be tracked too.” ”
Bansal was effectively the first IT person in both companies and set up the same Google Productivity apps and CARTA equity management software have been launched respectively. A spokesperson said 70% of Traceable’s biggest customers are also harness customers.
The culture was similar. As the harnesses and traceables matured, Bansal chose a general manager and ran their own distinctive new products or modules. When examining module revenue, executives from both startups rely on the theory that the battery refers to investor Neeraj Agrawal as “triple, triple, double, double, double, double, double, double, double.” It’s there. A model written by Agrawal for TechCrunch in 2015 describes the annual revenue growth that cloud software startups can target.
In November, Bangsal told two boards that his company is on a path to convergence and that it would be difficult for them to not compete with each other. He got clearance for the merger.
Initially, Traceable will act as its own unit within Harness, which is the parent company and where Nagaraj becomes the general manager. Bansal said the structure could change in the future.
He believes that technology can be combined well and will benefit from more stringent integration. Harnesses can help clients understand the origins of the source code, and Trackables can show how people use it.
Harrick called it a good result and said he was excited to integrate his bets on the bank.
“I think it’s an advantage for all investors that he is focused on running one company rather than two,” Harrick said.
