(above, GGV Partner Jixun Foo with Nimble Storage CFO, Anup Singh, at a recent GGV CEO Dinner)
This past Friday, GGV portfolio company Nimble Storage achieved a successful IPO, pricing at $21/share, 23% above the mid-point of its initial filing range, and closing at $33.93/share, 100% above the initial filing range mid point. We’ve been huge fans of the company since we first met CEO Suresh Vasudevan in ’10 and were delighted to join the company’s strong syndicate of VCs including Accel, Sequoia and Lightspeed in early ’12. With the strong public debut, its clear that public market investors are as excited as we are about Nimble’s prospects. Here are a few things we admire about the company:
Team. Before we invested, we extensively reference checked Suresh Vasudevan, the CEO, and the technical co-founders, Varun Mehta and Umesh Maheshwari (both from Data Domain). The calls were uniform in their conclusion that this was a very special team – the type of team that has the wherewithal and experience to build a multi-billion dollar company. Our experience as an investor in the company has only increased our conviction that this team, now fortified with strong additional executives such as Anup Singh, CFO, and Mike Munoz, VP of WW Sales, has the chops to continue pushing Nimble to new heights for many years to come.
Market. Great teams have a nose for big markets. That is most certainly the case with Nimble. The company refers to an $18Bn market opportunity that is still growing healthily. The company’s architecture and product line allow them to address all corners of this market from a strong competitive position. The early returns are very encouraging as well. Nimble has acquired over 2,000 customers since it launched product sales just a few years ago, and total bookings per account has grown from the initial purchase on average by over 2.2x within two years of the initial purchase.
Model/Metrics. Nimble is growing as fast as any systems company we’ve ever seen. Quarterly revenue is up over the past seven quarters from $8.2M to $33.4M in the October quarter. During this period of extremely rapid growth, the company has also invested heavily in R&D and Sales & Marketing. Despite this investment, the company has been able to sustain operating margin expansion and excellent gross margins. R&D as a percent of revenue is down to 26% year-to-date, from 55% and 29% in the two prior fiscal years. Similarly, S&M as a percent of revenue is down to 59% year-to-date, from 90% and 72% in the two prior fiscal years. Gross margins have been running at 65% year-to-date, at the high end of the company’s target range.
At GGV, we’re looking forward to a long and fruitful relationship with the team from Nimble Storage. We’re proud to be investors in the company and believe the future to be bright!