4 years in the past, Ping Identity was at a crossroads. A venerable participant within the single sign-on market, its product was not a market leader, and after 14 years and $128 million in enterprise capital, it wanted to discover a new path.
Whereas the corporate had once discussed an IPO, by 2016 it started placing out feelers for patrons. Vista Fairness Companions made a $600 million offer and promised to maintain constructing the corporate, one thing that company patrons wouldn’t assure. Ping CEO and co-founder Andre Durand accepted Vista’s provide, seeing it as a option to repay his traders and workers and exit the proper means. Even higher, his firm wasn’t subsumed into a big entity as possible would have occurred with a typical M&A transaction.
Because it turned out, the IPO-or-acquisition query wasn’t an both/or proposition. Vista continued to put money into the corporate, utilizing small acquisitions like UnboundID and Elastic Beam to fill in its roadmap, and Ping went public last year. The corporate’s expertise exhibits that personal fairness provides an affordable means for mature enterprise startups with first rate however not distinctive progress — just like the 100% or extra enterprise corporations are likely to favor — to exit, repay traders, reward workers and nonetheless hold constructing the corporate.
However not everybody that goes this route has a tidy final result like Ping’s. Some firms get introduced into the P/E universe the place they change the manager workforce, endure large layoffs or dump worthwhile items and cease investing within the product. However the three personal fairness corporations we spoke to — Vista Fairness, Thoma Bravo and Scaleworks — all needed to see their acquisitions succeed, even when they every go about it otherwise.