Blog Post

New Relic finally raises more money, adds $15M

Lew Cirne

New Relic, the cloud-based application performance management startup that has become synonymous with the term “lean startup,” has raised a $15 million expansion round. Although the company actually closed a $10 million round in October 2010 and has now raised $35 million in total, the venture funding belies New Relic’s success.

Whereas many hot SaaS startupsĀ — such as Marketo which announced another $50 million in VC funding Wednesday morning — raise money wherever they can to build up a war chest, New Relic has taken a different approach. As Founder and CEO Lew Cirne explained to me last year, SaaS lets New Relic operate profitably on a slim budget and staff while letting word of mouth and free downloads bring business to it. New Relic now has more than 14,000 active customers, more than twice what it had last year at this time, and manages more than 6 billion transactions a day.

Cirne likes to compare New Relic’s SaaS-based numbers to his previous software-based company, Wily (now part of CA(s ca)). At the time CA bought it, Wily had raised $45 million, but had only 500 customers (albeit all probably paying customers) and had a headcount of 270 employees, about half of which were in sales. New Relic almost certainly has grown in size to manage its skyrocketing user base, but as of October 2010, when it had about 5,600 customers — 900 of them paying customers — New Relic had only three salespeople.

The company’s flagship application performance monitoring product drives the customer base, but New Relic has been expanding its capabilities footprint recently. It added user monitoring earlier in the year and server monitoring just last week, both of which are available as part of the company’s free version.

DAG Ventures and Four Rivers Group led the latest round, with existing investors Allen & Company, Benchmark Capital, Tenaya Capital, and Trinity Ventures also chipping in.

Feature image courtesy of Flickr user gtorelly.

No Responses to “New Relic finally raises more money, adds $15M”