Harness Lab is not founder Jyoti Bansal's first startup. He sold AppDynamics to Cisco for $3.7 billion in 2017, the week it was scheduled to go public. In his latest venture, he raised $425 million, according to Crunchbase.
On Tuesday, Harness announced $150 million in debt financing, essentially a line of credit that the company can draw on as needed. This could be the last private financial step toward an eventual IPO. It is worth noting that the company raised another $55 million debt financing round in 2022.
Harness has built a fundamental toolset for software development teams, including CI/CD pipelines, code repositories, developer portals, infrastructure as code support, and more. The company hinted that it would use the funding to build or purchase other parts of its toolset.
Bansal said the company is looking at various ways to raise capital and is considering debt financing as a way for healthy listed companies to access additional capital. “We have been looking at what is the best way to raise capital. If you look at public companies, most public companies have access to debt. ,” Bansal said. he told TechCrunch.
It also says it's an efficient way to raise capital because it doesn't require giving up any shares. This can be a good final raise before taking the next logical step. “We think we can take this financing all the way to the IPO. We don’t need to raise any more capital. We may end up that way, but we don’t need to and we can go from here to an IPO without any additional investment.” We can do that,” he said.
The business seems well poised for its next big step. His ARR last year was over $100 million. This shows that the company is sustainable and can survive in the long term. Bansal said revenue continues to accelerate beyond that milestone.
The company recently hired a chief revenue officer and also has a chief financial officer. All this indicates that the company is eyeing his IPO.
Bansal sets three criteria for success. Harness Labs is aiming for significant revenue, far exceeding the $100 million he achieved last year. We want it to be efficient because Wall Street wants it now. And we aim for high growth. If Bansal continues to steer the business with these three goals of his, he believes it will eventually lead to a public offering.
“IPO is just a milestone in how we operate as a company. IPO is not an exit. It is the first step towards becoming a public company,” he said. “So whenever the gates are open and we're ready, we want the financials to be in place, the business to be strong and all the right pieces in place.”
And for Mr. Bansal, who sold his previous startup just before going public, being the head of a publicly traded company is a dream come true. “That’s the next challenge and I’m really looking forward to it,” he said.
The $150 million debt facility comes from Silicon Valley Bank and Hercules Capital.