Lightning strikes again as Electric reaches unicorn status MovieUpdates

Wherever we are in the journey of navigating a pandemic, remote working is still hot. Electric, one of several companies making it easier for organizations to work remotely, has capitalized on this trend so well in recent years that it’s now a unicorn.

Founder and CEO Ryan Denehy told MovieUpdates that the startup has raised $20 million in what it calls a Series D-1 from Harmonic Growth Partners, Bessemer, Greenspring and others.

This raise, which comes just five months after the $90 million Series D raise, was at a slightly higher price than the previous one, bringing the valuation to $1 billion post-money.

Electric provides IT infrastructure to SMBs to take most of the work off the IT department’s shoulders, such as deploying new hardware, keeping all machines and licenses compliant, granting and revoking permissions, etc. company in theory only one the right IT person, or outsource, for any problem solving or non-administrative work.

Image Credits: Electric

Hard Unicorn Data

Denehy has been aggressively raising money for Electric as the pandemic fueled the use and adoption of its product. The result of the capital increases and favorable market conditions is rapid growth. In 2021, Electric said it doubled users and revenue, expanding its annual recurring revenue (ARR) from $17 million in 2020 to $38 million last year, or 124%.

In fact, the company said it is on track to roughly double again this year, bringing its ARR to $70 million or more by 2022, according to Denehy.

Because Electric was willing to share hard revenue figures and targets, the company has provided a clear insight into the current state of unicorn valuations. With an ARR of $38 million and a valuation of $1 billion, Electric is worth approximately 26x its current ARR. That’s lower than the multiple reach many startups raised during the go-go fundraising climate of 2021.

But it gets even more interesting when we consider that the company is probably well capitalized and so will not need to increase again this year. That means Electric can close out 2022 with, say, $70 million ARR and the same $1 billion price tag. At that revenue scale and valuation, Electric would be worth just over 14x its ARR, a multiple that feels cheap given its loosely triple-digit growth rates, even at today’s more constrained market prices.

Electric confirmed that it raised this capital at a higher price. So we read that it hasn’t scaled its value so richly in the process that it could run into trouble when looking for more capital in the future. If the company can meet its growth targets for 2022, it will look cheap in 2023, making it a good place to raise more capital if it wants or needs to, and keep its growth buzzing.

Accelerate goals

“I wanted us to expand our goals beyond the initiatives we based the Series D on,” said Denehy. “In this market I want us to be as aggressive as we want without affecting the runway.”

Denehy expanded his plans and shared some product initiatives in the works this year.

First, Electric is working on a lightweight version of the product that can be purchased and deployed through self-registration. Building on that, the company is also developing a self-service marketplace where customers can purchase add-ons or other software (such as antivirus) from Electric.

The company also wants to be proactive with its product and deliver IT insights to customers, as well as make recommendations to help customers make decisions about security, new technology products and software updates.

In addition, the additional $20 million will help Electric make more (and bigger) mergers and acquisitions. According to CrunchBase, Electric has so far acquired Sinu and TechVera.

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