As reported by Maria Deutscher on SiliconAngle, Splunk Inc announced that it secured $1 billion from Silver Lake to help accelerate company growth. [splunk 1b silver splunkdeutschersiliconangle]
- Splunk Inc. has secured a $1 billion investment from Silver Lake to help accelerate company growth
- Silver Lake is getting senior notes as part of the deal, which can be converted into shares of Splunk’s stock at a higher price
- Splunk is a cloud-based monitoring software used by cybersecurity teams and software engineers
- Splunk’s cloud-based services account for over 50% of its total revenue, with an 83% YoY growth in 2021
- To date, Splunk has raised over $2.4 billion in eight funding rounds, with Hellman & Friedman and Starboard Value being its most recent investors
Splunk Inc revealed that the fresh funding will be used to buy back company shares and support the company’s product suite in order to generate more revenue in an ever-growing tech economy. [splunk 1b silver splunkdeutschersiliconangle]
As Silver Lake has invested a staggering $1B into Splunk, the latter’s shares went up by 12% as soon as the news went public. It means that the latest investment has brought trust among the shareholders and traders about Splunk’s future. Also, Silver Lake also believes that Splunk has huge growth potential and that the company will grow significantly in the future.
“We have long admired Splunk’s world-class team and technology, and we believe the company is now at an important inflection point,” said the Chairman and Managing Partner of Silver Lake, Kenneth Hao.
“We are confident in the opportunities ahead and eager to work with Doug and his team to support Splunk’s next phase of growth,” he added.
In return for the whopping $1 billion that Silver Lake has invested, the company is getting senior notes as part of the deal. The senior notes can be converted into shares of Splunk’s stock at a higher price (f $160 per share) than what the stock is currently trading for today on the NASDAQ ($139.60).
The notes will need to be paid back by July 2026, but Silver Lake can choose to pay them back earlier if they want to. Additionally, the notes will generate an interest rate of 0.75% per year.
CEO Splunk, Doug Merritt, on Silver Lake and Splunk Partnership
“We’ve significantly evolved our business since we began our transformation to become a cloud-first company over two years ago, and today’s announcement reaffirms the strength of our business fundamentals, cloud strategy and high-growth trajectory…
“Silver Lake has a strong reputation and track record of investing in innovative technology companies, and with their support, we are accelerating toward our goals as we deliver the most scalable and powerful data platform in the cloud.” [splunk 1b silver splunkdeutschersiliconangle]
Splunk Financial Profile
|Funding Round||Date||Lead Investor||Capital Raised|
|Post-IPO Equity||October 16, 2022||Starboard Value||–|
|Post-IPO Equity||March 4, 2022||Hellman & Friedman||$1.4B|
|Post-IPO Equity||June 22, 2021||Silver Lake||$1B|
|Secondary Market||September 23, 2011||Akkadian Ventures||–|
|Venture Round||September 1, 2011||–||–|
|Series C||September 1, 2010||Ignition Partners||$25M|
|Series B||January 1, 2006||JK&B Capital||$10M|
|Series A||December 1, 2004||August Capital||$5M|
To date, Splunk has raised over $2.4 billion in eight funding rounds. The company’s most recent investors are Hellman & Friedman and Starboard Value. In total, the company is funded by nine investors. [splunk 1b silver splunkdeutschersiliconangle]
Splunk bought TruSTAR Inc. in March 2021. TruSTAR Inc. is a startup that created a tool that helps security administrators investigate cyber attacks by organizing and managing information about cybersecurity threats.
Splunk also invested in Aclima’s Series B funding round on July 21, 2021, valued at $15.8 million. The cybersecurity company has acquired 16 companies, with TwinWave being their latest acquisition on November 8, 2022.
Based in San Francisco, California, Splunk is a cloud-based monitoring software that helps companies identify risks using automatically generated data. Specifically, the software provided by Splunk is used by cybersecurity teams to help them see signs of a potential data breach in their infrastructures.
Apart from security teams, Splunk is also used by software engineers to help spot errors and performance issues in the applications. Other use cases of Splunk include generating server error logs and workload testing in applications. [splunk 1b silver splunkdeutschersiliconangle]
What’s different about Splunk in the market of enterprise software solutions is that it was one of the first to adopt its services and infrastructure to the cloud. As the company announced its $1 billion investment in Silver Lake, it also offered a new cloud-based service with the investment news.
As an early adopter of cloud-based services, Splunk has seen significant growth in overall company operations, specifically, in its cloud-based service model. In 2021, their revenue from only the cloud services saw an 83% year-over-year growth as the revenue reached over $877 million per annum. Now, their cloud-based business accounts for more than 50% of their total company revenue.
Splunk’s Cloud adoption Came at a Price
Even though the company doing significantly well via its cloud-based services, the initial days were that great In fact, the company was facing huge losses when it first shifted to the cloud. In the 2nd quarter of 2021, Splunk had to spend more and more to support its cloud integration plan, which resulted in significant losses in share prices.
The CEO Doug Merritt, however, was optimistic about the company’s future growth and took the losses with courage. He asked the shareholders and investors to wait and see the result until late 2021, and the result was positive.
Even when the company was adopting the cloud, its primary focus was to improve the software’s cybersecurity capabilities, which have been its strength since its inception. In conjunction with the $1 billion dollar Silver Lake investment, Splunk has announced a service called Security Cloud, a cloud-based tools service that provides the tools necessary to detect and investigate infrastructure breaches.
Similarly, the ever-growing cybersecurity market is spending billions of dollars on threat detection and breach prevention software. So naturally, the transition forced Splunk to keep its focus on the aforementioned categories. [splunk 1b silver splunkdeutschersiliconangle]
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