$100M Round Turns San Diego’s Seismic into Region’s Newest Unicorn
Seismic, an enterprise software company with ambitious growth plans, has raised $100 million in a Series E financing and added Microsoft chairman John W. Thompson to its board of directors.
The venture investment, which the San Diego startup announced Tuesday, is one of only a few so-called mega-rounds—$100 million or more—recorded this year in the region. (In Southern California, rounds that large are more often raised by life sciences companies.)
Seismic recently hired its first chief financial officer, John McCauley, who has stints at ServiceNow (NYSE: NOW) and Illumina [NASDAQ: ILMN). Co-founder and CEO Doug Winter last month told Xconomy that he anticipates the company will be prepared to go public by late next year, but the path to an IPO is often a winding one, so we’ll see.
Seismic sells cloud-based “sales enablement” software for company sales and marketing teams, which use it to create and distribute customized collateral, the informational materials that help them win deals. Its 500-plus customers include the credit card company Capital One (NYSE: COF), genomics giant Illumina (NASDAQ: ILMN), and software startup Qualtrics.
Silicon Valley’s Lightspeed Venture Partners and funds and accounts advised by mutual fund company T. Rowe Price (NASDAQ: TROW) led Seismic’s Series E round. Existing investors General Atlantic, JMI Equity, and Jackson Square Ventures also participated, Seismic said. Previously, the company had raised $79 million from investors.
Thompson, who has investing in startups for about a decade, joined Lightspeed as a venture partner this year. Previously, he was CEO of startup Virtual Instruments, a Lightspeed portfolio company. Before that, he spent a decade as CEO of cybersecurity company Symantec (NASDAQ: SYMC).
Winter, in a phone interview Monday, said Thompson’s enthusiasm for Seismic was among the factors that clinched its decision to go with Lightspeed as a new investor.
“We were in a situation where we ended up with quite a few offers…a lot of the terms were fairly similar, so a lot of it came down to the people,” he said. “I could immediately see the value of having [Thompson’s] experience in my corner, personally, as well as in the company’s corner. We have a great board that I’m really honored to have…but none of them have ever been CEO before, and none of them have been CEO of a rapidly growing tech company in the software space, and John brings that to the table in spades.”
Proceeds from the financing round will go toward improving Seismic’s software and adding additional features requested by customers, Winters said. He anticipates the company’s engineering team, currently about 180 people, will grow by another 100 people next year.
The money will also be used to expand its presence in Europe and Australia. This year, Seismic opened its first office in Europe, in London, and in Australia, in the cities of Sydney and Melbourne. In addition to its San Diego headquarters, Seismic also has offices in multiple U.S. cities., including a significant presence in Boston.
According to the company, its latest round was raised at a post-money valuation of $1.05 billion. That means Seismic, which was founded in 2010, is now considered a “unicorn”—a privately owned startup valued by its investors at $1 billion or more. (As this has gotten comparatively less rare, related terms have been added to the startup lexicon, such as decacorn, for a startup valued at $10 billion or more.)
As of August, there were roughly 260 private startups in the U.S. worth $1 billion or more, according to research firm CB Insights.
Valuations of U.S. companies in that high-flying group reportedly top out with ride-hailing giant Uber’s $72 billion. Bankers, however, have told the company it could be worth as much as $120 billion on the public markets. Uber’s IPO is expected next year.