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Fastly S-1

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Re: Fastly S-1

#31

Post by celestialcheese »

From 2017 to 2018, they added 147 new paying customers. Of which, 57 were enterprise and based on their metrics claiming > 80% of revenue was from these "enterprise" deals, probably high dollar.

Still, ~$50m in marketing/advertising spend to earn 147 new paying customers (340k/customer) seems high to my untrained eye. Do those enterprise deals and that "132% Dollar Expansion Rate" justify such high CPA?

Those with experience with this kind of enterprise-focused company - is this normal?

Re: Fastly S-1

#32

Post by ArtWomb »

hn_throwaway_99 wrote: post #28
ArtWomb wrote: post #27

Earlier quoted context omitted.

It's also interesting that the $30M figure is approx their R&D spend! Underscores the importance of offsetting those startup costs with policies that promote public-private partnerships and other subsidies for innovation ;)

Why? Fastly will make a couple people very rich, and they seem to be doing fine without subsidies. Why should public funds go toward concentrating wealth even further?

Well, tech transfer can be a slow process. Primarily because of legal formalities around indemnification, liability, etc. You also have the common scenario where many competitors are working in the same problem domains. Only to find after years of effort that they have independently arrived at eerily similar solutions!

Re: Fastly S-1

#33

Post by speeq »

Interesting that Brexit uncertainty is in their risk factors:

> These developments, or the perception that any of them could occur, have had and may continue to have a significant adverse effect on global economic conditions and the stability of global financial markets, and could significantly reduce global market liquidity and limit the ability of key market participants to operate in certain financial markets. In particular, it could also lead to a period of considerable uncertainty in relation to the UK financial and banking markets, as well as on the regulatory process in Europe. Asset valuations, currency exchange rates, and credit ratings may also be subject to increased market volatility.

Re: Fastly S-1

#34

Post by mbesto »

ramraj07 wrote: post #26
burger_moon wrote: post #24

Interesting that just 10 customers make up over a third of revenue for them.

Wouldn't that be true for many companies, even AWS possibly?

Absolutely not, 33% revenue concentration, no matter what business you are in is NOT good from an investor perspective. Super risky.

Re: Fastly S-1

#35

Post by wongarsu »

pault wrote: post #19
mxstbr wrote: post #4

> We generated a net loss of $30.9 million for the year ended December 31, 2018, and as of December 31, 2018, we had an accumulated deficit of $146.2 million. Wow, I did not think an "enterprise-y" company like Fastly could be burning that much cash on growth!

It says something about the industry when "only" a $30.9M annual burn rate sounds small.

The $30M is 20% their annual revenue, or 18% of their current assets. That doesn't seem out of line for a growing business, and is something you can do without Venture Capital.

Re: Fastly S-1

#36

Post by lkbm »

burger_moon wrote: post #24

Interesting that just 10 customers make up over a third of revenue for them.

Judging from pages 4-5, I'm guessing these include NYT, New Relic, Ticketmaster, Alaska Airlines, Spotify, and Github.

They mention other cloud platforms as competition, and Azure has a CDN. I doubt Github would switch anytime in the near future, but the dangers posed to smaller companies by the consolidation under giants is interesting. What happens when your competitor doesn't just try to steal your clients, but can actually just acquire them?

They also mention one risk as their dependence on AWS, a competitor, and that if all the cloud providers blackballed them, they'd be in trouble.

Re: Fastly S-1

#37

Post by enitihas »

tyingq wrote: post #18
speeq wrote: post #16

Earlier quoted context omitted.

I'm using Firebase Hosting (by Google) and the IP address resolves to Fastly, at least in the EU.

That's pretty odd. Why would Google use a 3rd party to front their own service?

I think firebase is using fastly before they got acquired by google. There was a post on HN describing their move from couldfront to Fastly.

https://news.ycombinator.com/item?id=4314209

Re: Fastly S-1

#38

Post by wongarsu »

JMTQp8lwXL wrote: post #22
lathiat wrote: post #7

Earlier quoted context omitted.

They are more like Cloudflare or Akamai

I think I would invest in Cloudflare before this, but that'd be based on name recognition.

Be aware though that name recognition in the enterprise space is very different from name recognition for small businesses and startups. Fastly focuses on the enterprise space, so having no name recognition with startups isn't really relevant to them.

Re: Fastly S-1

#39

Post by moderation »

via https://twitter.com/justincormack/status/1119217911380545536 interesting to see some technical detail in the S1 including a likely reference to WASM, WASI and Lucet [0].

"Moreover, our platform is highly technical and complex and relies on the Varnish Configuration Language (VCL). Potential developers may be unfamiliar or opposed to working with VCL and therefore decide to not adopt our platform, which may harm our business."

"We will continue to work on open source projects, which will empower developers to build applications in multiple languages, and run them faster and more securely at our edge"

[0] https://github.com/fastly/lucet/

Re: Fastly S-1

#40

Post by ec109685 »

celestialcheese wrote: post #31

From 2017 to 2018, they added 147 new paying customers. Of which, 57 were enterprise and based on their metrics claiming > 80% of revenue was from these "enterprise" deals, probably high dollar. Still, ~$50m in marketing/advertising spend to earn 147 new paying customers (340k/customer) seems high to my untrained eye. Do those enterprise deals and that "132% Dollar Expansion Rate" justify such high CPA? Those with ex…

Those enterprises are re “-occurring revenue, so I am sure their LTVs are factored in with the spend.
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