App performance monitoring startup PagerDuty raises its IPO price range to $21-$23/share, could raise $240M at a $1.69B valuation at the high end of the range
Becky Peterson / Business Insider :
Context & Ripple Effects
PagerDuty's roadshow is accelerating: after filing confidentially for an IPO in January (confidential IPO filing) and disclosing FY2018 revenue of $79.6M, up 41% YoY, with 10K+ customers including GE, IBM, and Netflix in its S-1 filing, the company has lifted its price range to $21-$23/share — implying roughly $240M raised and a $1.69B valuation at the high end.
The raise signals strong institutional demand for developer-facing monitoring tools, and it lands two years after AppDynamics' own IPO filing for app performance management software showed the category's path to public markets. The pricing move proved prescient: PagerDuty's first day closed at $38.25, up 59%, valuing it near $2.8B (first-day close).
First-order effects
- PagerDuty's existing investors and employees sell into a hotter market than the January confidential filing anticipated — the raised range prices the deal well above the September private valuation of just over $1B.
Second-order effects
- A 59% first-day pop to ~$2.8B leaves money on the table but hands PagerDuty a currency and credibility advantage over private monitoring rivals still weighing an exit.
Third-order effects
- If the AppDynamics-to-PagerDuty sequence holds, observability and DevOps tooling consolidates around publicly listed platforms with acquisition currency, squeezing sub-scale private competitors toward M&A or down rounds.
The trend: Developer-tools and monitoring companies are using the 2019 IPO window to convert steady 40%-growth SaaS revenue into public-market valuations that far exceed their last private marks.