JumpCloud, the late-stage startup that is modernizing the notion of corporate directories in a cloud context, announced a $159 million Series F investment on a healthy $2.56 billion valuation today.
Sapphire Ventures led the round with new investors participating, including Owl Rock, Whale Rock Capital, Sands Capital and Endeavor Catalyst, along with existing investors General Atlantic, BlackRock and H.I.G. Growth Partners. The company has now raised almost $356 million with $259 million coming over the most recent two rounds.
JumpCloud CEO Rajat Bhargava says that investor interest in the company is driven by his belief that the directory structure is the center of an IT organization, especially as it relates to identity, and that includes mobile device management, single sign-on, multi-factor authentication, privileged access management and identity governance. He sees all these approaches coming together in the directory structure.
“We believe that those are all part of one core directory platform. So when you think of a directory very holistically and broadly, it is really about securely and frictionlessly connecting users and their identities to whatever they may need to access,” Bhargava told me.
They do this by going after SMBs and mid-market companies with a cloud product that simplifies the management of these complex systems. Jai Das, who is managing director at lead investor at Sapphire Ventures, believes that this part of the market was being mostly left out of directory services because of that complexity before JumpCloud and others attempted to fill the void.
“Large enterprises have put in place various directory and security solutions to solve these problems, but with large investments in tech outlays and IT support teams. SMBs and mid-sized enterprises don’t have the big budgets or large staff to replicate the large enterprise model,” Das said. He adds that developing for this market is a huge challenge because it requires “building a product with all of the features large enterprises require, plus it has to be easy to use, easy to deploy and not [be] terribly expensive.”
While the company is not revealing any revenue metrics, Bhargava did say that they have added 2,000 customers since we last spoke in November, for a total of 5,000, and he said that the company should double head count by the end of the year from the 300 last November.
He also said that he has been making progress at building a diverse company, and one way he does that is just asking every hiring manager if they interviewed historically underrepresented candidates.
“The simple act of just asking that question makes such a massive difference inside of an organization. We’ve encouraged all of our hiring managers to interview diverse candidates but we also, when there’s an offer about to be made or when they’re in the [interview] process, we are asking them did you talk to [diverse] candidates. And then if you didn’t, we’re going to ask you to go search for those folks [before making a hiring decision],” he said.
Bhargava didn’t want to talk about and IPO when we spoke last year, and not much changed this time around. “We’ll see. It’s just not part of what we’re worried about or focused on,” he said.
He did indicate however, that with such a substantial amount of money on the balance sheet, he would consider some strategic acquisitions. “We will focus on M&A and where it makes sense will integrate different components and teams into our business,” he said. With a tight labor market, that could be about adding engineering, as well as adding functionality to the platform, he said.