Self-Declared Unicorn?

Post by
Scott Francis

Appian has declared itself a "unicorn" based on current internal valuation analysis. I've never seen a company declare itself a unicorn to the press like this, versus someone else saying it as a result of reporting on a financing round.? And I think the key distinction is that unicorn status is applied to a company that raises money at a valuation north of $1B.? Of course, this unicorn business is all a bit of a side show - some of their valuations will come down, and the valuations ignore the fact that investors have preferred shares with rights that make the deals more like debt than equity in some (all?) cases.

So I'm not penning this blog to take shots at Appian's financials or prospects, but to point out that the business of BPM is alive and well.? With "more than $100 million in revenue in 2015" it is clearly continuing to grow.? (I don't have historical data on their revenue numbers so I can't comment on trajectory, but it appears that Appian is growing nicely overall).?

One of the investors, from NEA, seems to be pushing the press around the valuation:

An investor in 17-year-old company Appian Corp. wants the world to know his firm is now valuing it at north of $1 billion?even though the company hasn?t raised funding in two years. [...]

He compared Appian to Atlassian Pty. Ltd., the software development tools maker that went public in December and has a market cap of more than $5.6 billion. ?These are not hypergrowth companies?they?re doing it profitably. These are all-weather unicorns,? Mr. Weller said.

I'm in alignment with Weller's thinking in this sense: profitable, growing companies will survive tough times. These companies' ability to generate cash to fund operations and growth is what distinguishes them from the growth-at-all-costs crowd.?

Though Appian has roots in the BPM market, they're pitching the custom application market:

Since 2011, the amount of money spent on custom software has been growing more than three times as fast as the amount spent on commercial enterprise software, according to Forrester Research, which estimates that $136 billion was spent globally on custom software in 2015.

They're also positioning companies like Salesforce as competitors, alongside IBM and Pegasystems.? Appian is shooting for an IPO, so is BPM destined to be hot? Or will successful BPM companies bury the lede and focus on different branding?

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