Ardoq, the enterprise architecture startup, raises $125M to help organizations make sense of their networks – TechCrunch

As organizations continue to expand their digital architecture, a new category of enterprise software has emerged to help them manage this process. Now, Ardoq — which makes enterprise architecture tools that not only give companies an accurate picture of their digital networks, including who is working on what, when and where — has completed a round that will help it build its own business: the startup has 125 million $ raised in a Series D which sources close to the company say the company is valued at over $300 million.

Ardoq is based in Oslo and around 30% of its enterprise customer base is in Scandinavia; the rest is spread across Europe and the USA. The full list includes such as Carlsberg, Condé Nast and the US Federal Communications Commission.

Erik Bakstad, co-founder and CEO said in an interview that there are plans to use the funds for more business development to grow this user list but also to invest in his product. For now, the tool is useful for getting a picture of what the network looks like today, and for reporting when something crashes or potentially violating a security or privacy protocol, and offering suggestions on how to fix the problem. The longer-term goal is to develop more predictive analytics and modeling tools that leverage the “digital twin” that Ardoq is building from a network.

“Today’s enterprise architecture is very much about the framework in the organization,” he said. “Our vision is to combine this with behavioral data and metrics [based on the] digital twin. For example, you can also carry out scenario analyses. We will accelerate this product roadmap.”

EQT Growth led the round, with One Peak also participating. This is a significant round for Ardoq, who had previously raised less than $40 million since inception in 2013. But to put the outsized, recent round into context, Ardoq saw particularly strong growth: ARR grew 80% in 2021.

Ardoq’s expansion reflects much of what has happened in the enterprise software world at large. Digital transformation has been the order of the day for many companies in recent years: spurred on by Covid, companies large and small have invested in updated apps, hardware and new ways of working that leverage cloud services to meet the challenge of changing business conditions.

But that’s 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 disruption in another part of the system, it can have consequences that go beyond a single person, team or application.

Essentially, enterprise architecture tools are designed to manage this: 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.

This, in turn, becomes useful data, not just to ensure a network is running smoothly, but to feed other functions: security teams use digital twin images to build and operate better defenses and detect anomalies in networks and when systems fail or have been breached , they can then be used to rebuild part or even the entire network.

Similarly, it can give those planning an organization’s IT investments a better and more accurate picture of where resources are being allocated and whether this is aligned with the organization’s goals. Those managing information in an organization can use enterprise architecture models and data as part of their network reviews to ensure data is not being used in ways that violate privacy regulations. And so forth.

Unsurprisingly, enterprise architecture tools are an area that already has a number of players. This includes Orbus software, which was acquired by PE firm SilverTree Equity in 2021; and LeanIX, last lifted in 2020, a $120 million round, and was allegedly targeting another raise last year, which PitchBook data says never happened (though I’ve heard the round actually did raise: I’ll try to track that separately). Enterprise companies that sell warehousing, cloud computing, and other networking and operational tools could also delve deeper into the market over time.

Although platform providers may already offer some level of data of this type to their customers – AWS for example started a service only last November – one argument for having the information processed by a third party is that it is platform agnostic and more objective when it comes to predictive models and suggesting potential changes or investments.

Bakstad and his co-founder Magnulf Pilskog came up with the idea of ​​founding Ardoq in the great tradition of first building a tool to solve their own problem.

“It was 2013 and we were working for big companies: banks, insurance companies, financial services companies and telecom companies,” he recalls. Pilskog had founded Miles, an IT consulting firm, where Bakstad was one of the senior engineers. “We had the ‘iceberg problem’ with all of them. Companies have made large investments in digital transformation, but they have done so with a very small amount of information. The risk of default was related to the underlying complexity of these investments. IT was not successful.”

So they created a tool to address this, a way to map systems, data and people, “to process, to understand how things are connected and what the impact would be if you moved a 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 effect with an Excel spreadsheet: “If you change one cell, it affects all the others.”

The company has a somewhat “mechanical Turk” approach to how it works, which I think says a lot about the most effective enterprise technology. Ardoq relies heavily on technology it’s developed to read and monitor networks, but Bakstad said it also complements this with “workflow surveys” that it regularly conducts with customers to learn user perceptions of how things work. This can often be the only way to get truly complete pictures of how things work, beyond the abstractions of data that might claim things are fine when they aren’t.

The round comes at a good time for investments in growth phases in Europe and once again underlines how much the region has changed in recent years. It wasn’t long ago that an ambitious tech company relocated from Europe to the US when it came to scaling. This is now far from the norm.

Victor Englesson, the partner at EQT Growth who led that round (and now joins Ardoq’s board of directors), told me his firm has evaluated no fewer than 1,000 startups for growth rounds over the past year. He said this will likely continue to increase:

“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 be an investor in.” Ardoq stood out among the many options, he added, because of the business potential – he estimates that enterprise architecture tools are a €3 billion market – but also because it has already executed its strategy well.

“Erik and his team have made Ardoq one of the world’s leading enterprise architecture SaaS companies,” he noted in a separate statement.

Ardoq, the enterprise architecture startup, raises $125M to help organizations make sense of their networks – TechCrunch Source link Ardoq, the enterprise architecture startup, raises $125M to help organizations make sense of their networks – TechCrunch

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