As organizations continue to build out their digital architecture, a new category of business software has emerged to help them manage that process. Now Ardoq — which makes enterprise architecture tools that give organizations an accurate picture of their digital networks, including who is working on what, when and where — has closed a round that will help it build its own business: The startup has raised $125 million in a Series D that sources close to the company tell us Ardoq is worth over $300 million.
Ardoq is based in Oslo and approximately 30% of its corporate customer base is located in Scandinavia; the rest is divided between Europe and the US. The full list includes Carlsberg, Condé Nast, and the US Federal Communications Commission, among others.
Erik Bakstad, the co-founder and CEO, said in an interview that the plan is to use the funding for more business development to expand that list of users, as well as to invest in his product. At this point, the tool is useful for getting a picture of what the network looks like today, and for signaling when something crashes or potentially violating a security or data protection protocol, and suggesting how to fix it. The longer-term goal is to build more predictive analytics and modeling tools that leverage the “digital twin” Ardoq builds of a network.
“Enterprise architecture is very much about the scaffolding in the organization these days,” he said. “Our vision is to combine that with behavioral data and metrics [based on the] digital twin. This means that you can also perform scenario analysis, for example. We will accelerate that product roadmap.”
EQT Growth led the round and One Peak also took part. This is an important round for Ardoq, which has so far raised less than $40 million since its inception in 2013. But to put the outsized, most recent round in some context, Ardoq has experienced particularly strong growth: ARR grew by 80% in 2021.
Ardoq’s expansion reflects much of what has happened in the business software world in general. Digital transformation has been the order of the day for many organizations in recent years: spurred by Covid, enterprises large and small invested in updated apps, hardware and new approaches to leverage cloud services to meet the challenge of changing business conditions.
But that also created a problem: more complex, interconnected systems and people working less in silos and more interdependent — meaning if something fails or accidentally causes a failure in another part of the system, it can have consequences that go further. reach beyond a single person, team or application.
Enterprise architecture tools are essentially built to manage that: they help put a house in order, by helping a company get an accurate picture of what a system looks like and how it works.
That, in turn, becomes useful data, not only to keep a network running smoothly, but also to feed other functions: security teams use digital duplicate images to build and execute better defenses and to detect anomalies in networks. , and if systems do fail or are breached, they can then be used to rebuild part or even the entire network.
Likewise, for those planning an organization’s IT investment, it can give them a better and more accurate picture of where resources are being allocated and whether it aligns with what the business wants to do. Those who manage information at an organization can use business architecture models and data as part of their network audits to ensure that data is not used in ways that violate data protection rules. And so forth.
Unsurprisingly, enterprise architecture tools are a space that already has a number of players. They include Orbus Software, which was acquired by PE company SilverTree Equity in 2021; and LeanIX, which last raised a $120 million round in 2020, and reportedly aimed for another raise last year that never happened, according to PitchBook data (I’ve heard the round has actually been raised, though: I’ll try to follow that separately). Enterprise companies that sell warehousing, cloud computing, and other networking and operational tools may also enter the market more deeply over time.
While platform providers can already provide their customers with this kind of data to some degree — AWS launched a service last November, for example — one argument in favor of a third-party processing the information is that it is platform independent and more objective when it comes to predictive modeling. and proposing possible changes or investments.
Bakstad and his co-founder Magnulf Pilskog came up with the idea to start Ardoq in the grand tradition of initially building a tool to solve their own problem.
“It was 2013 and we were doing work for big companies: banks, insurance companies, financial services and telcos,” he recalls. Pilskog had founded Miles, an IT consultancy, where Bakstad was one of the senior engineers. “We all struggled with the ‘iceberg problem’. Companies made large investments in digital transformation, but did so with a very small amount of information. The risk of failure was linked to the underlying complexity of those investments. IT failed.”
So they came up with a tool to address that, a way to map systems, data, and people “to process to understand how things were connected and what the impact would be if you moved one piece,” he said. “That’s why a lot of projects fail, moving a piece and the impact it has. A lot of people don’t understand that.” He compares the impact with an Excel sheet: “If you change one cell, it affects all the others.”
The company has a bit of a “mechanical turk” approach to how it works, which to me says a lot about the most effective business technology. Ardoq charges a lot around technology it built to read and monitor networks, but Bakstad said it supplements that with “workflow surveys” it regularly hands out to customers to get users’ perceptions of how things work. This can often be the only way to get a really complete picture of how things work, beyond the abstractions of data that might claim everything is fine even when it isn’t.
The round comes at a tumultuous time for growth-stage investment in Europe, underscoring once again how much the region has changed in recent years. It wasn’t too long ago that an ambitious tech company in Europe moved to the US with the aim of scaling up. Now that is far from the norm.
Victor Englesson, the partner at EQT Growth who led this round (and now joins Ardoq’s board) told me his company has evaluated no fewer than 1,000 startups for growth rounds in the past year. He said this will likely continue to grow:
“The fundamentals are there: we have more developers in Europe than in the US, but valuations are still generally lower,” he said, making it “a very attractive market to operate in as an investor.” Ardoq stood out among the many options, he added, for its business potential — he estimates enterprise architecture tools is a $3 billion market — but also because it’s already executing its strategy well.
“Erik and his team have built Ardoq into one of the world’s best enterprise architecture SaaS companies,” he noted in a separate statement.
This post Ardoq, the enterprise architecture startup, raises $125 million to help organizations understand their networks – TechCrunch was original published at “https://techcrunch.com/2022/03/09/ardoq-125m-enterprise-architecture/”