CA, a giant IT vendor from New York, acquired the Israeli startup BlazeMeter earlier today. The company didn't disclose the terms of the agreement but the financial newspaper Calcalist reported a $100M deal.
This is not too far off from the benchmarked predictions that were produced by our rating systems. Zirra's AI based rating technology for startups gave the company a $80M-$90M valuation long before the company's actual exit. Our algorithms also calculated that in case of an exit, the price of BlazeMeter would rise to $150M-$200M. Our forecast missed the exit probability, though, with a chance of 10-20% only.
The return on investment is pretty good here, although the total is about $100M, not something that an average VC from Sandhill Road would brag about. But the biggest investors in BlazeMeter are two small venture capital funds: YL and Glilot, which manage only a few dozen million dollars each. According to Calcalist, YL ventures holds around 40% of the company after initially investing $1.2M and then investing a few million more a couple years later. There's no doubt the CA deal made this VC happy.
However the company was valued, the acquisition by CA will help BlazeMeter extend its product portfolio for DevOps. BlazeMeter is a commercial, self-service load testing platform-as-a-service (PaaS) that allows users to test the performance of their web and mobile applications, websites, and APIs, using cloud-computing resources and on-premise services.
The company is one of the few leaders in providing testing platforms that are compatible with open-source tools such as Apache JMeter and Selenium, thereby attracting not only enterprises but also independent software developers who seek more affordable and agile solutions.
Thus, BlazeMeter has helped democratize performance testing as organizations demand their DevOps to test earlier in the funnel, and deliver faster, better new software updates and innovations. With BlazeMeter’s solution, developers can test earlier and more often in the application lifecycle.
BlazeMeter also offers an enterprise version with unlimited concurrent users and tests as well as enhanced support; at the same time, the company is open to requests from out-of-budget users. The rapidly growing BlazeMeter community is comprised of over 100,000 developers and the company claims prominent global brands such as Adobe, Atlassian, Gap, NBC Universal, Pfizer, and Walmart as customers.
At the beginning of this year, we surveyed 125 US-based software developers. The majority of them use enterprise testing solutions, while a large minority use open source solutions. Enterprise solutions enable more efficient, continuous testing, but are more expensive. Open source solutions are suitable for developers on a tighter budget, but are more difficult to setup, use, and deploy.
The greatest disadvantage of enterprise solutions is generally their cost, while complicated deployment is the greatest disadvantage of open source solutions. The time and resources required to setup and run tests are a general problem – any solution that reduces complexity is highly favorable.
Users of enterprise testing solutions conduct performance testing with far greater frequency than users of open source testing solutions, and are more in line with the concept of continuous testing. They also consider their testing practices suitable for a higher level of performance.
We found that BlazeMeter’s key features are considered highly appealing and thoroughly cover the needs of developers. Particularly valued features are BlazeMeter’s developer community and its sophisticated analysis of results.
BlazeMeter's offering is considered to be very good in terms of value. Interestingly, the majority of current users of enterprise solutions find their needs met by the company’s Pro and Basic packages.
Here are some key success factors we found on BlazeMeter months before the deal:
And, here are risk factors mentioned at our original report on BlazeMeter, months before today's deal:
Crowded Market, Fast Exit
Before it was acquired, BlazeMeter was trying to take on the congested market of performance testing PaaS technology. It competed in the application performance monitoring market with companies like Amazon's AWS, Altassian and IBM BlueMix, and in other segments such as performance testing.
This is a huge market: the performance testing market has an estimated annual revenue of around $40-60B. The leading performance testing companies include Soasta, Neotys, Stackify, LogicMonitor, and Perfecto Mobile. These companies are in the most direct competition with BlazeMeter.
The industry of app testing and PaaS is rapidly growing as the digital world continues moving towards mobilization and as consumers increasingly expect flawless performance. Software developers need to bring effective products to market as quickly and securely as possible - the companies which can provide the best service and support will ultimately beat out their competition.