As AppDynamics lands $120 million, its focus shifts to expansion and new products

AppDynamics, the startup that helps organizations monitor their applications’ performance, is banking that its way of using software agents to gather application data will help it lead the pack in the crowded application intelligence market, in which companies like New Relic and AppNeta compete alongside legacy players like IBM (S IBM) and HP (S HPQ). And it looks like the investment community is betting that AppDynamics will take off as well, as the company closed $120 million in a pre-IPO round of funding, with Silicon Valley Bank providing $50 million of that total in debt financing.
While other application monitoring services tap into company servers to gather infrastructure data, AppDynamics works by having users install software agents that infiltrate their applications and analyze every line of code in their system, said AppDynamics CEO Jyoti Bansal. The simple task of a user clicking on a website can trigger the action of millions of lines of code being deployed across multiple clouds and data centers, Bansal said, and so it’s important to have the ability to trace all that code in order to derive helpful information from it.
After the agents capture the data, they then convert it into simple dashboards tailored for either developers, IT operations or management and business staff. Even though the same data is presented to each group, the dashboard interprets the data in specific ways so as to help each team.
While New Relic has been on a tear as of late, as it recently made its New Relic Insights product free to current customers, Bansal said AppDynamics doesn’t necessarily compete with the company directly because New Relic is targeting small business whereas AppDynamics tries to capture large enterprises like banks and financial institutions; in this case, the company competes with legacy companies.
The startup plans on using a portion of the funding to boost its sales and marketing staff as well as developing its technology to provide better analytics for top executives at its customers. Additionally, AppDynamics hopes to eventually branch out from only doing monitoring and analytics and plans to develop ways to remediate errors in the system so as to provide a sort of “self-learning, self-healing application infrastructure,” said Bansal.
New investors to the company include Battery Ventures, ClearBridge Investments and Sands Capital, who join previous investors Lightspeed Venture Partners, Kleiner Perkins Caufield & Byers and Institutional Venture Partners. With the new round of funding, AppDynamics now has over $200 million.