Sources: Amsterdam-based data search and analytics startup Elastic, which has raised ~$100M, has confidentially filed for an IPO aiming for $1.5B-$3B valuation
Elastic is expected to aim for a valuation between about $1.5 billion and $3 billion once it hits Wall Street. — The IPOs keep coming. Tweets: @amontalenti and @jordannovet Tweets: Andrew Montalenti / @amontalenti : The news of @elastic filing to go public is amazing in more ways than one: 1. It's a fully distributed team. Sales, eng, support all with no “central” office. 2. It is an open source company where the creator is CEO. 3. Makes $$$. Includes PaaS/SaaS model. http://www.recode.net/... @jordannovet : elastic has got to be feeling emboldened by the fact that mongodb stock has gone up 72% from its $33 debut price http://www.techmeme.com/...
Context & Ripple Effects
Elastic's confidential filing follows the template MongoDB set in late 2017, when the open-source database company priced its IPO below its private-market valuation — yet as investor Andrew Montalenti noted in the Recode thread, MongoDB's rising stock is precisely what emboldened Elastic to file. The confidential-route play is now standard among this cohort: Cloudflare filed a confidential S-1 ahead of its September listing, and BigCommerce used the same mechanism.
What makes Elastic a notable test case is its structure rather than its size: Montalenti flags it as a fully distributed company with no central office, an open-source project whose creator runs it as CEO, and a business mixing PaaS/SaaS revenue on only ~$100M raised. The $1.5B-$3B target range would put it well above where MongoDB entered public markets.
First-order effects
- Elastic's backers convert a ~$100M cumulative investment into a liquid position at a $1.5B-$3B target, while the company gains public currency for hiring and M&A without disclosing financials during the roadshow.
- MongoDB's post-IPO stock performance directly de-risks Elastic's filing — the pricing-below-private-valuation worry that hung over the 2017 class no longer applies to the followers.
Second-order effects
- Other venture-backed infrastructure companies weighing exits — Domo had already held its IPO organizational meeting, and Cloudflare and BigCommerce were in the confidential-filing queue — get a clearer read on how public markets price distributed, open-source-rooted software firms.
- A successful Elastic debut would push competing search and analytics vendors to articulate their own monetization stories around hosted offerings, since the PaaS/SaaS mix Montalenti highlights is what public buyers appear willing to pay for.
Third-order effects
- If the pattern holds, the open-source-to-IPO pipeline becomes institutionalized: creator-led, remotely-run infrastructure companies treating public listings as a funding stage rather than an exit, with confidential filings smoothing the transition.
- The longer arc cuts both ways — once public, these companies face quarterly scrutiny that eventually forces restructuring, as Elastic's later automation-driven layoffs and engineering reorganization suggest.
The trend: Open-source infrastructure companies are using confidential IPO filings to reach public markets faster, with MongoDB's post-listing performance setting the risk appetite for the wave behind it.