Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Elastic files for an IPO

sec.gov

Post reply on HN
Print view View original

121–130 of 143 posts

Re: Elastic files for an IPO

#121

Post by feeblebee »

artellectual wrote: post #97

Elastic is a company I’ve been following from the start when they just had elasticsearch opensource project. Watching this company grow to this point has been inspirational. I really want to meet / talk to the people who made this company. They made open source work. I’m happy to use their products, filebeat, kibana, elasticsearch, and their cloud offering has been top notch. They got a lot of things right. Now elast…

I'm also a big fan and I'm really very happy for them and their success.

I was using elasticsearch 7 years ago in production already. And just for me, from the outside, it always looked like a crazy trip. I knew there was something going on when nearly half of my twitter timeline tweeted "am working for elasticsearch now". (they renamed to elastic later)

I was chatting in early 2017 with Shay and along the way he mentioned they were almost 500 then and now ~18 months later they are +800. Crazy!

> They made open source work.

Yes!

They have built and still build impressive (open source) projects and they managed to still earn money :) - this is the real big thing!

Re: Elastic files for an IPO

#122

Post by mathattack »

bogomipz wrote: post #64
mathattack wrote: post #58

Earlier quoted context omitted.

The formula for SaaS companies is generally growth + net margin should equal 40%. If they’re growing 100%, even a negative 50% margin leaves them in the clear by 10%.

>"The formula for SaaS companies is generally growth + net margin should equal 40%." Can you say exactly what formula this is and what is a formula for? Also what is the significance of the number 40 as a target?

Beambot has the source. The general idea is its ok to lose Money if your net (growth minus losses) is higher than your cost of capital. (VC money expects a 30-50% rate of return) In general SaaS companies have high fixed costs so it’s a race to get big enough to cover them. The rule of 40 flags companies that are too unprofitable or not growing fast enough.

Like all financial metrics (PE ratio, etc) it’s still just a crude guide.

Re: Elastic files for an IPO

#123

Post by sonnyblarney »

beambot wrote: post #68
scarface74 wrote: post #61

Earlier quoted context omitted.

Losing $50M on $150M of revenue. (Net margins of -33%). This is pretty reasonable and in line with Twilio and Mulesoft. MongoDB was significantly worse at -60% net margins. Why is a -33% net margin “reasonable” instead of just being “less unreasonable”?

Worth looking at the 40% rule for SaaS: https://www.feld.com/archives/2015/02/rule-40-healthy-saas-c... The rule states that a "sane" target for annual growth rate + profit margin is 40%. At a 100% YoY growth rate and -33% profit margins, Elastic is sitting at 70% -- making it pretty solid!

What is the 40% based on? Because there isn't a hint of justification in that post.

If customer acquisition costs are really high, then they're throwing good money after bad.

All of this talk of 'solid financials' while a company is losing money every quarter and whereupon there's no evidence of profit at the unit level ... is scary, it feels like one of those reddit ico pump-it-up chats.

It's all very highly speculative, is what it is. So let's hope it's a great company, with a solid offer and they manage the growth effectively.

Re: Elastic files for an IPO

#124

Post by laichzeit0 »

burnmaster wrote: post #66
calcsam wrote: post #37

This is an extremely solid financial statement. $150M in revenue, growing ~100% per year; I'd project a valuation between $3B and $4B. Twilio, Mulesoft, and MongoDB are probably the best comparables here -- open-source and dev-tools based SaaS IPOs. All of these were very successful at IPO and afterwards, and even compared to these, Elastic looks great. * They're growing at almost 100% per year which is incredible. T…

I see several responses that mention MongoDB for purposes of comparison and seem to conclude Elasticsearch fares favorably. It should be noted: [1] Unlike MongoDB (which is a ground-up build), Elasticsearch is basically an API layer on top of Apache Lucene. This is relevant because they haven't built and don't maintain, control, or own the source of their primary IP. [2] Unlike MongoDB (General Purpose) Elasticsearch…

Anyone that's tried to build anything non-trivial using ElasticSearch's aggregation API and MongoDB's aggregation API will just laugh at the idea of using MongoDB over ES. The ElasticSearch APIs are just so much nicer to use than MongoDB APIs.

MongoDB aggregation feels like writing code in assembler.

Re: Elastic files for an IPO

#125

Post by isoos »

tootie wrote: post #46
calcsam wrote: post #37

This is an extremely solid financial statement. $150M in revenue, growing ~100% per year; I'd project a valuation between $3B and $4B. Twilio, Mulesoft, and MongoDB are probably the best comparables here -- open-source and dev-tools based SaaS IPOs. All of these were very successful at IPO and afterwards, and even compared to these, Elastic looks great. * They're growing at almost 100% per year which is incredible. T…

Elastic also has an excellent market position. They have far fewer credible competitors than Mongo.

I'm surprised that nobody mentioned cratedb (crate.io) in this thread. It is built on top of Lucene (and IIRC ElasticSearch), provides similar scalability, and fully supports SQL (both for inserts/updates and queries). They got a Series A a few months back.

Re: Elastic files for an IPO

#126

Post by nasalgoat »

jimmy1 wrote: post #52
jedberg wrote: post #45

Earlier quoted context omitted.

Any time there is an IPO filing, I immediately come to the comments on HN, because there is always someone well versed in reading these things that can provide an excellent summary. Thank you!

Now we are just missing the comment like... "It's really just a wrapper around Solr and a management layer bolted on top I don't understand all the rage!"

To be fair, their documentation is terrible. Trying to set up filebeat feeding into logstash and figuring out custom GROK patterns requires forensic-level Google-fu to sift through vague blog posts and grab small nuggets from forums because the official docs basically say nothing of value.

Re: Elastic files for an IPO

#127

Post by ousta »

vquemener wrote: post #114
ousta wrote: post #108

Earlier quoted context omitted.

i would be surprised if they were supporting sql as query language. do you mean by using spark sql?

Actually, they really do support SQL as a query language : https://www.elastic.co/en/blog/an-introduction-to-elasticsea...

yeah a "subset of SQL" and on the page you gave me 0 example of a JOIN. so no JOIN no SQL sorry

Re: Elastic files for an IPO

#128

Post by kentm »

burnmaster wrote: post #66
calcsam wrote: post #37

This is an extremely solid financial statement. $150M in revenue, growing ~100% per year; I'd project a valuation between $3B and $4B. Twilio, Mulesoft, and MongoDB are probably the best comparables here -- open-source and dev-tools based SaaS IPOs. All of these were very successful at IPO and afterwards, and even compared to these, Elastic looks great. * They're growing at almost 100% per year which is incredible. T…

I see several responses that mention MongoDB for purposes of comparison and seem to conclude Elasticsearch fares favorably. It should be noted: [1] Unlike MongoDB (which is a ground-up build), Elasticsearch is basically an API layer on top of Apache Lucene. This is relevant because they haven't built and don't maintain, control, or own the source of their primary IP. [2] Unlike MongoDB (General Purpose) Elasticsearch…

I think calling it just an API later over Lucene is a bit dismissive. I’ve worked with search products built directly on Lucene vs ElasticSearch and there’s significant value add even without the API. In particular, sharding, replicating and managing indexes is trickier than you’d expect and took up a lot of dev time. ElasticSearch made that work go poof.

Re: Elastic files for an IPO

#129

Post by AtlasBarfed »

isoos wrote: post #125
tootie wrote: post #46

Earlier quoted context omitted.

Elastic also has an excellent market position. They have far fewer credible competitors than Mongo.

I'm surprised that nobody mentioned cratedb (crate.io) in this thread. It is built on top of Lucene (and IIRC ElasticSearch), provides similar scalability, and fully supports SQL (both for inserts/updates and queries). They got a Series A a few months back.

Jepsen showed elasticsearch was pretty bad at partition tolerance. It was a pretty early version, but it would have been nice to see how much they fixed with another Jepsen run.

And distributed SQL of any complexity doesn't really scale. As soon as data that a join depends on is on other machines/nodes, you need quorums and dependent network I/O. Granted with high-speed networks that is getting to be less of a burden speed-wise, but the reliability problems still exist.

Re: Elastic files for an IPO

#130

Post by AtlasBarfed »

ousta wrote: post #127
vquemener wrote: post #114

Earlier quoted context omitted.

Actually, they really do support SQL as a query language : https://www.elastic.co/en/blog/an-introduction-to-elasticsea...

yeah a "subset of SQL" and on the page you gave me 0 example of a JOIN. so no JOIN no SQL sorry

"We support SQL on our distributed data platform" has to be the new big lie of distributed systems salespeople.

I'm not saying that computing joins, aggegates, sorts, etc can't be done in a distributed fashion, it just takes time, a lot of network reliability/reattempts, and understanding of the approximate nature of results if there are ongoing "eventually consistent" updates rolling through the cluster(s).

Post reply on HN