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1/ Why and how we at @VistaraCapital invested in @kentikinc...
2/ The Need
Observability is critically important across a company’s entire IT architecture. For any business understanding exactly how every part of their IT architecture is performing and where they can optimize and improve is crucial to being able to provide the level of
Observability is critically important across a company’s entire IT architecture. For any business understanding exactly how every part of their IT architecture is performing and where they can optimize and improve is crucial to being able to provide the level of
3/ service expected by both internal and external customers of the products and applications of modern enterprises. This applies whether they are using cloud, on-premise or have taken a hybrid approach to hosting their infrastructure and applications.
4/ Over the last decade or thereabouts as businesses came to understand this the adoption of Infrastructure Monitoring was quickly followed by Application Performance Monitoring (APM).
5/ Providers of solutions for both infrastructure and application monitoring such as @datadoghq and @NewRelic have seen great success and have made the transition from private to public companies as customers realized that observability leading to the metrics and insights
6/ that were surfaced by these solutions were essential to their ability to provide great products and experiences to their own customers. In addition to infrastructure and applications, a company’s own IT network is an equally important component of their overall architecture,
7/ and in some cases (such as internet service providers and some gaming companies) the network itself IS the product. Until relatively recently the same level of attention was not necessarily paid to networks despite their vital nature, and with recent covid-related
8/ traffic spikes they have become even more critical, as described in more detail in this Atlantic article. https://www.theatlantic.com/ideas/archive/2020/05/miracle-internet-not-breaking/611212/">https://www.theatlantic.com/ideas/arc...
9/ The analytics and insights derived from @Kentikinc‘s network observability platform now enables companies to have the same level of visibility and analytics driven insight across their networks as they have come to expect from other parts of their IT architecture.
10/ We at Vistara believe that the Kentik platform is an extremely valuable solution that addresses a very obvious need for many modern businesses in capturing and maximizing the value of their network data
11/ to improve and optimize the uptime, speed, efficiency, security, and cost of their IT networks.
12/ The Team
Since first encountering Kentik CEO @avifreedman we have been ceaselessly impressed by his capability, vision, and the incredible depth of his domain expertise. To describe someone as a polymath is not a compliment to be paid lightly
Since first encountering Kentik CEO @avifreedman we have been ceaselessly impressed by his capability, vision, and the incredible depth of his domain expertise. To describe someone as a polymath is not a compliment to be paid lightly
13/ but it’s certainly true in this case! In addition to all of this Avi is a very pragmatic and personable guy who we found easy to work with from day 1. A further testament to the regard in which Avi is held is the quality of the team that has come together at Kentik,
14/ a team that continues to execute on the vision. The Kentik team has made the complex simple and continue to innovate and show the value of their solution to the expanding range of Kentik subscribers.
15/ The Product
As we learned more about the business we were demo’d the Kentik platform. On being shown the entire global network of an (anonymized) global technology company presented alongside key performance metrics as a single screen graphic we had a collective “wow” moment
As we learned more about the business we were demo’d the Kentik platform. On being shown the entire global network of an (anonymized) global technology company presented alongside key performance metrics as a single screen graphic we had a collective “wow” moment
16/ That such a complex and dynamic network was presented with such intuitive elegance that even to non network engineers it was somewhat understandable, made it really clear to us that this was a very powerful piece of technology.
17/ The Customers
Kentik has awesome customers. Their customer base comprises a who’s who of the most sophisticated and advanced technology companies in the world, including several internet service providers, gaming companies, content delivery networks and
Kentik has awesome customers. Their customer base comprises a who’s who of the most sophisticated and advanced technology companies in the world, including several internet service providers, gaming companies, content delivery networks and
18/ household name software companies. That such an educated cohort of customers see the benefit of using Kentik really validated the value proposition of the product in our eyes, and our customer conversations along with strong metrics like
19/ growth rate, gross/net retention, and lifetime value certainly bear this out. This case study https://youtu.be/xQr0k4SwRHA ">https://youtu.be/xQr0k4SwR... on high flying @zoom_us describes in more detail exactly how the network visibility and performance realized through using Kentik helps them ensure
20/ they continue to provide the level of service to customers that has brought them so much success.
21/ How We Helped
Our investment in Kentik was comprised of a combination of both debt and equity, which has several benefits:
Our investment in Kentik was comprised of a combination of both debt and equity, which has several benefits:
22/ Firstly our investment boosts the company’s cash balance and our long-term, fully non-amortizing debt is actually available to invest in growth rather than having to plan to pay it back early in the term.
23/ Here is some more detail on why we don’t believe that amortizing term debt makes sense for growing tech companies make sense: https://vistaracapital.com/case-against-amortizing-loans-for-tech-companies/">https://vistaracapital.com/case-agai...
24/ Secondly while still having the desired capital in the bank through our creative hybrid debt/equity solution Avi and other founders and early employees were able to avoid additional meaningful dilution and
25/ own more of the company they have built and grown than had they taken the equity only route.
26/ Thirdly from a shareholder perspective as a fellow equity investor, Vistara is fully aligned with growing the business, rather than taking a very credit-oriented downside-focused “how will we be repaid” approach.
27/ @dannycrichton described Avi’s perspective on how our solution resonated in a bit more detail in this @TechCrunch interview: https://techcrunch.com/2020/08/21/how-one-founder-leveraged-debt-to-drive-early-growth-and-avoid-dilution/">https://techcrunch.com/2020/08/2...
28/ Overall we believe that Kentik has significant growth ahead of it and are excited to participate in it as an owner of the business alongside the founders, employees, and its other angel and VC investors.
