Guest post by Paul Judge, an Atlanta serial entrepreneur and investor. Judge serves as chief research officer at Barracuda Networks; executive chairman at Pindrop Security; and managing partner of JudgeVentures. Judge can be found here, and at@PaulJudge.
Even though I hop around the country a lot, I’m based in Atlanta and thought I’d explore the “unicorns in Atlanta” — doesn’t that sound like it would be the title of an Outkast track?
Let’s start with Atlanta startup exits in the last 10 years that were one billion dollars or more.
- AirWatch was the most recent exit as it was acquired in 2014 for $1.4 billion by VMWare. (founded in 2003, acquired in 2014)
- Radiant Systems was acquired in 2011 by NCR for $1.2 billion. (founded in 1985, IPOed in 1997, acquired in 2011)
- Witness Systems was acquired in 2007 to Verint for $1 billion. (founded 1988, IPOed in 1997, acquired in 2007)
- Per-Se Technologies was acquired in 2007 by McKesson for $1.8 billion. (founded in 1985, IPOed in 2004, acquired in 2007)
- Internet Security Systems was acquired in 2006 by IBM for $1.3 billion. (founded in 1994, IPOed in 1998, acquired in 2006)
- Scientific Atlanta was acquired in 2006 by Cisco for $6.9 billion. (founded in 1951, IPOed in 1959, acquired in 2006)
An initial observation is that all of the billion-dollar exits in the last decade, except AirWatch, became a public company first. AirWatch was founded in 2003 so would be the only one that fits into Lee’s definition of a unicorn. The acquisition was in 2014, but one can presume that their value was $1 billion before the end of 2013. This is one Atlanta company that could have reasonably been on Lee’s list.
All of the exits were business-to-business companies. Two were cybersecurity companies (AirWatch and ISS). One was in point of sale and payment (Radiant). One was in health IT (Per-Se). These are clusters where Atlanta has been strong—cybersecurity, financial tech and health IT. The other two were in video distribution (Scientific Atlanta) and workforce optimization (Witness Systems).
The Atlanta billion dollar exits averaged 10.5 years to liquidity event. This compares to 7 years for the set of unicorns that Lee examined. The Atlanta companies then averaged another 9 years after IPO to acquisition ignoring Scientific Atlanta that was acquired almost 50 years after its IPO.
Let’s take a look back at other notable exits before the last decade.
- TradeX was acquired by Ariba for $5.6B in 2000.
- MindSpring merged with EarthLink in 2000. MindSpring was worth about $1.3B at the time.
- WebMD merged with Healtheon in 1999 in a $7.9B deal.
There are several publicly traded technology companies based in Atlanta with over a billion dollars of market cap.
- Intercontinental Exchange.$23B market cap. (founded in 2000).
- CoStar. $6B market cap. (founded in 1987).
- NCR Corporation.$5.8B market cap. (founded in 1884).
- Manhattan Associates. $2.8B market cap. (founded in 1990).
There is an exciting set of privately held tech startups in Atlanta that are growing in value. Many are venture funded and some are bootstrapped. Two that are arguably worth over a billion dollars already are Autotrader.com founded in 1997 and Mailchimp founded in 2001.
Here are 25 Atlanta startups that are considered to be the most valuable or most promising. (in alphabetical order)
Autotrader: $1Billion in revenue. Read more.
Cardlytics: $50M revenue in 2013 and $104M in funding. Read more.
Clearleap: $20M in revenue and $16M in funding. Read more.
CloudSherpas: $75M in revenue in 2012. Read more.
Damballa: $44M in funding. Read more.
eFolder: $26M in funding. Read more.
Endgame: $52M in funding. Read more.
Endochoice: $30M revenue in 2012. Read more.
IngeniousMed: $11M revenue in 2012. Read more.
IonicSecurity: $38M in funding. Read more. (Disclosure: I’m an investor)
Kabbage: $10M in revenue. Read more.
Mailchimp: $200M in revenue. Read more.
News Distribution Network: 573 million video views monthly. Read more.
Paymetric: $14M in revenue in 2012. Read more.
Pindrop: $12M in funding. Read more. (Disclosure: I’m an investor)
PlayOn Sports: $35M in funding. Read more.
Purchasing Power: $200M revenue in 2012. Read more.
Salesfusion: $4.8M in revenue and $10 in funding. Read more.
ShareCare: $91M in funding. Read more.
Silverpop: $80M in revenue. Read more.
SoloHealth: $25M in funding. Read more.
Suniva: $224M in funding. Read more.
The Rainmaker Group: $20M revenue in 2012. Read more.
Vendormate: $25M revenue in 2013. Read more.
WhatCounts: $30M in funding. Read more.
Atlanta has a history of home-runs. Not just Hank Aaron’s 755 home runs, but also the list of billion dollar-plus exits that we explored in this post. We also highlighted 25 companies that are at bat currently and swinging for the fences. We have to continue to build great companies. We have to continue going up to the plate and pointing out to the fences.
A common question is, does Atlanta have the talent to build multiple billion-dollar companies. The short answer is “we can do that.”
Georgia Tech with 21,000 students boasts an engineering college that is ranked fifth in the country for undergraduate and graduate engineering, according to U.S. News. Atlanta is also home to Emory, Georgia State, Morehouse, Spelman, Clark Atlanta and others. In all, there are more than 176,000 college students enrolled in Atlanta, ranking it as seventh in the country amongst America’s 50 largest metro areas. Atlanta also ranks fifth in university research, with $1.01 billion in expenditures.
If you are reading this from outside of Atlanta, we welcome you to come participate in what we are building here.
If you are sitting at your desk in Atlanta, as you get back to work, throw on your headphones and sing out Ludacris’ verse: “Make millions every year, the south’s champion/ cause all I do, all I, all I, all I/ all I do is win win win no matter what.”