Domo CEO Josh James onstage at Domopalooza. (Credit: Rebecca Ricks/Domo)
Josh James is having a coming-out party five years in the making.
After years of tinkering in semi-secrecy in Salt Lake City, James’ company Domo has finally exited stealth, showing off its business management platform to 1,000 attendees at its first user conference and announcing another major funding round that values the company at $2 billion.
“This is like five startups in one,” James says as the buzz of attendees at Domopalooza is audible in the background. “It’s been a beast of a project and it’s something that doesn’t exist in your organization today.”
For a company with a run-rate of $100 million projecting 100% growth and with 1,000 customers, Domo’s been somewhat under the radar in recent months. Though its product has been active for months, customers had to sign a non-disclosure agreement in order to see it in action until now. James says the reason for that is simple—the company didn’t want to give competitors a look at what it was building—but the quiet has also led to what James believes are misconceptions about Domo’s adoption and scope, creating a chip on the shoulder of the CEO who built Omniture and sold it to Adobe for $1.8 billion and has raised tens of millions from top firms like Benchmark.
“Everyone categorized us incorrectly. They were dismissive, which we loved,” says James. “To me, it’s silly. This team has done it before and wouldn’t be back doing it again just to make a dashboard or something that just connects a couple things. So they came to a conclusion that made them sleep at night.”
Investors see a much bigger opportunity than Omniture’s price tag or even Tableau Software, the business intelligence company trading at a market cap of nearly $7 billion today. That’s led Domo to raise $200 million in a Series D round led by BlackRock, with Capital Group, Glynn Capital and existing investor GGV Capital joining the round. The company’s raised $450 million to date and more than doubled its valuation from $825 million in Feb. 2014 to $2 billion today.
James says the company needed $50 million but added another $100 million as a buffer and the rest to help ensure it doesn’t need to raise again for another year, at which point James expects Domo to be on a $200 million run rate, breaking even on cash-flow and ready to consider an IPO in a healthy market. “At that level you need some cash on the balance sheet. If we decide to go public, then we can, but it won’t be because we need the money.”
As for what Domo really does that James is so quick to say would be mislabeled as simply business intelligence? The platform integrates with Salesforce.com, Google Analytics and a host of other data sources like Box, LinkedIn and Instagram, and provides what the company calls five layers of a data pyramid to translate that raw information into business results. In a demo, chief strategic solutions officer Matt Belkin showed off each one. To connect to the data, Domo offers 40 one-click apps to integrate data from CRM providers, social media and sales and product databases. A “Magic” tool then allows the user to prepare the data by setting rules for how that data goes to work through a visualization of the relationships (say you want three sources of data all to flow to the same chart) that dynamically gathers SQL code under the hood in real time.
Next is the visualization of the data through a card building tool that suggests its own chart based on the data you selected but allows for adjustment by segmentation, region, and other parameters. A collaboration engine, called Domo Buzz, allows users to share those cards with coworkers and takes a snapshot of how they look in that moment to more easily eyeball changes over time. Users can set alerts to notify them when those cards change in real time and can also run predictions based on the charts from simple regressions to show if a month’s sales are on pace to cluster analysis.
Examples of customer use cases range from a credit card provider tracking the social media buzz around its contests to give away seats at the U.S. Open to a toy company that tracks its flagship products sales and pipeline from a dozen data sources and a bread company that checks that its loaves are coming in at the proper weight, James says. “A CEO came up to me at a conference and said, ‘You’re Josh James?’ And he pulled up Domo on his phone and said, ‘Dude, I use this every day.’ With a low-margin business, this stuff makes a huge difference.”
Domo costs about $25,000 a year at minimum (about $2,000 per user for a team of a dozen at its smallest) with some companies spending more than $1 million per year. James says Domo’s revenue retention rate is 150% as customers typically ramp up their seats on the product from one year to the next like the credit card company, which went from 25 seats to 50 to 350 over two years.
James himself believes he’s built a startup on a trajectory comparable to Workday, the 10-year-old cloud software company that went public in 2012 and has a market capitalization today of nearly $17 billion. With the new funding, Domo will continue to build out its already large-development team—James says there are essentially five full-sized teams for each layer of the platform—while building out a sales organization to now proactively pitch Domo to the market.
“The reason our funding round was eight times oversubscribed is we built a $100 million business that’s doubling while making everyone come through the front door, sign an NDA and on-ramp manually,” James says. “You tell me what happens now when the covers are off.”
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