Jyoti Bansal has a pretty good track record when it comes to launching startups. He sold his first company, AppDynamics, for $3.7 billion the week it was supposed to go public in 2017. His latest one, Harness, announced a $230 million Series D today at a valuation of…wait for it…$3.7 billion.
The fact the numbers are the same was not lost on Bansal, and in fact the Cisco deal closed at the end of March in 2017, almost exactly five years ago. But Bansal sees a big difference between the two companies.
"Yes, it's the same price, but I would say when we sold AppDynamics that was like the end of the road. This feels like the beginning of the road. We are just starting. That's the difference," Bansal said.
He sees the developer tools category where Harness operates as one that presents a much bigger opportunity, with a potential market of 30 million developers worldwide. He points out that developer talent is expensive and hard to find, and his company's goal is to make these employees operate more efficiently.
"We want to build the tools for developers to be much more efficient. They are often doing mundane tasks, which are taking 50% of their time…They're doing too many things manually that they don't need to, and that's where we simplify most of these things, and use AI to assist with some of that," he said.
That platform has expanded over the years and includes CI/CD tooling, cloud pricing optimization, feature flags and chaos engineering. In some cases, Bansal has chosen to build, in others buy, such as when the company bought ChaosNative last month, or Drone.io in 2020.
He has been raising money for some time, and in spite of his pedigree and the success of the company to this point, he said fundraising in the current climate was definitely more challenging. "This is the hardest fundraising market that it's been for quite some time, but we still had a lot of interest from investors," he said. It started with one knocking on his door, and once that was in place others joined in, and there are a large number of participants in this round.
While the number of employees is already nearing 700, up from 250 at the time of his Series C at the beginning of last year, with this capital, Bansal plans to put more resources into R&D to build additional modules on the platform, while expanding the company's reach internationally. As an experienced startup founder, Bansal has given a lot of thought about how to build a diverse and inclusive company.
He says that starts with building the right culture where everyone feels welcome. "You must have a positive culture, and you hear all the stories of tech companies and startups with a 'bro culture'. To me, the first thing is that the culture has to be right. We cannot have a culture with any group feeling like this is not the right place for them or not feeling welcome," he said.
He said that the second part is actively trying to be diverse. "You have to go out of your way to hire and recruit employees from diverse backgrounds. Otherwise, it just doesn't happen by itself. So we focus a lot of that with our recruiting teams, and they have goals and targets designed around increasing our diversity, and then we track it," he said.
Today's investment was led by Norwest Venture Partners along with new investors JP Morgan, Capital One Ventures, Splunk Ventures, Adage Capital Partners, Balyasny Asset Management, Gaingels and Harmonic Growth Partners. Existing investors also participated, including ServiceNow, Menlo Ventures, IVP, Unusual Ventures, Citi Ventures, Battery Ventures, Alkeon Capital, GV (formerly Google Ventures), Sorenson Capital, Thomvest Ventures and Silicon Valley Bank.
The round breaks down to $175 million in equity and $55 million in debt financing. The company's valuation has increased by $2 billion since its $85 million Series C round last year when it was valued at $1.7 billion. The company has now raised $425 million, according to Crunchbase data.