Elastic, developer of an open source search technology that's increasingly popular with developers, said it plans to raise up to $100 million in an initial public offering, according to an SEC filing on Wednesday.
The startup, founded in the Netherlands in 2012, offers a stack of open source and proprietary tools and cloud services, including its flagship Elasticsearch, that have been embedded into many web-scale applications.
In the IPO filing, the company said solutions in its Elastic Stack "address a wide variety of use cases including app search, site search, enterprise search, logging, metrics, application performance monitoring (APM), business analytics, and security analytics."
Elasticsearch has emerged as a serious challenger to Splunk, a leading log management solution, as well as products for rapidly searching for material in websites from industry giants like Google and Amazon Web Services.
Elastic also offers Kibana, a data visualization plugin; Logstash for building data processing pipelines; and Beats, a lightweight agent that shuttles data to its other tools. It complements those open source technologies with X-Pack, a set of commercial features.
Data, application and web search functionality can also be accessed through a portfolio of Software-as-a-Service offerings called Elastic Cloud, which is available for on-premises deployments with Elastic Cloud Enterprise.
Components of Elastic Stack have been embedded into solutions from many industry giants.
Uber uses Elasticsearch for locating nearby drivers, Walgreens to find products on its e-commerce platform, Tinder for matching dating partners, and Adobe to help users find tools for design projects. Sprint relies on Elastic to log subscribers and SoftBank to monitor its IT environment.
In the filing, the company also identified Cisco, eBay, Goldman Sachs, NASA, Microsoft, Mayo Clinic, The New York Times, Wikipedia, and Verizon as companies that have deployed its tools in mission-critical systems.
In the SEC filing, Elastic illustrated the ubiquity of search technology:
"Dragging your finger across a map on a smartphone screen is search. Zooming into a specific time frame in a histogram is search. Mining log files for errors is search. Forecasting storage capacity two weeks into the future is search. Using natural language processing to analyze user sentiment is search," the document states.
Elastic had more than 5500 paying customers by the end of July, generating US$159.9 million in revenue in fiscal year 2018—up 81 percent over the previous year. More than 90 percent of that business comes through subscription services.
Even as the company has grown, Elastic has not been profitable to date. In its latest fiscal year, the company said that it incurred a net loss of US$52.7 million, about the same as the year before.
Elasticsearch is often provisioned by developers through the company's public cloud partners. At the same time, the technology competes with products from those tech giants like Google Custom Search, Amazon CloudSearch and Microsoft's Bing Custom Search.
At The NexGen 2017 Conference & Technology Expo, hosted last December by The Channel Company, Tom DelVecchio, founder of Enterprise Technology Research (ETR), told attendees Elasticsearch was creating an interesting dynamic in the arena of logging services.
ETR research showed Splunk was becoming overshadowed by Elasticsearch across the AWS, Microsoft Azure and Google public clouds, DelVecchio said, because of the economic benefits of the open source solution. Other log management competitors include Alert Logic, Loggly and LogRhythm, as well as products from Cisco, Symantec, and IBM.
Leading up to the IPO filing, Elastic has secured more than US$100 million in venture funding. The company employs more than 900 people around the world.
The SEC filing said Elastic's channel particularly relies on systems integrators and referral partners. The company also has alliances with cloud providers, OEMs and MSPs, and technology partners.
Elastic's channel drives sales "especially to US federal government customers and in certain international markets."
Elastic warned investors that if "we are unable to develop and maintain effective sales incentive programs for our channel partners, we may not be able to incentivize these partners to sell our offerings to customers."