Ping Identity was in the news last week with a huge deal to sell itself to private equity investors after several years as a public company.
Ping CEO Andre Durand launched his identity company way back in 2002, raising around $128 million in venture funding along the way. In a 2015 interview with TechCrunch, Durand talked about going public within a year or two. That didn’t happen, at least not then, but what did happen may be one of the stranger founder tales ever told — one with twists and turns Durand admits he could never have imagined.
“There’s no way I could have predicted the series of events which ultimately led me here. First of all, there’s always multiple ways to grow, multiple ways to succeed. There’s not one path. That’s something I’ve come to kind of appreciate and realize,” Durand told me in an interview last week, during which he discussed his unusual startup journey.
A simple twist of fate
The story began in 2002, when he launched the startup in Denver. By 2016, Ping had matured, and Durand began getting feelers from a number of parties looking to buy his baby. He wasn’t necessarily looking to sell, but the offers started coming, and he felt obligated to at least listen. He had investors and longtime employees who had traveled with him on the journey to that point, and he felt he owed it to them to see if he could give them a good return.
Ultimately, it was a random email from a Vista Equity partner that led to Ping’s initial sale.
“I was maybe a little bit curious or maybe I looked at my day and said, well, I got nothing going on. He’s gonna buy me lunch. I said yes,” he said. The lunch turned out to be a great discussion on identity, and Durand liked what he heard from the Vista partner. Eventually, that led to an invitation to bid on the company and Vista being the buyer.
He doesn’t discount the role of chance in this process.”Serendipity plays a role in your fate, right? You can maybe steer it a little bit, but you know a lot of exciting things sometimes just kind of happen. And if I’m really honest, serendipity played a role in my fate in going with Vista,” he said.
Fate took him to a good place, one where Vista could provide him with far more resources than he could have raised from venture capital to help Ping get to the next level.
“They wanted to get behind my dream and efforts. And lo and behold, they 100% did that. They 100% supported me in every single move we wanted to make,” he said. That support helped turn the organization into one that could be the public company he envisioned.
One of the main things that Vista brought to Ping was the notion of operational excellence. “Operational excellence is a big part of the Vista playbook, and building repeatability into the back office and best practices in all of your functions to build a very efficient world-class software company,” he said. “Had we not made the investments in the back office and implemented a number of these practices, we wouldn’t have been in as good of a position as we were to go public.”
Vista also provided Ping with the resources to hire people and to make six strategic acquisitions, something he very likely couldn’t have done otherwise. The acquisitions, in particular, helped fill in missing pieces in the platform in preparation for becoming a public company.
To public and back
As it turned out, getting acquired by Vista didn’t mean his dream of taking his company public was quashed. On the contrary, Vista wanted to help Ping get there. The plan worked, with Ping going public in 2019. Of course, the subsequent pandemic and economic downturn have not always been kind to software companies in the public markets.
Ping had to navigate this turbulent period, and when Thoma Bravo came knocking with a $2.8 billion offer — one that represented a roughly 63% premium of the share price before the offer — it was once again an opportunity for Durand to take care of investors who had helped his company to this point.
“It has been a time of illiquidity in volatile markets,” he said. “That’s what you have to recognize, so if we’re entering a recession and markets are volatile, you have to weigh that into the equation of what’s best for investors over what time horizon — one year, two years, three years — and it varies.”
He said he had to balance the needs of all these different constituencies and the cost of staying public versus returning to being private.
“We looked at the offer. Clearly, Thoma Bravo had conviction on Ping in the space, and this is an area where we felt shareholder interests were aligned. We felt this was the best return for shareholders. And then secondary to that, we felt that this provided an opportunity for the company to accelerate our own vision.”
But beyond the monetary aspect of the transaction, there is that last point about Ping itself — Durand sees another opportunity to continue growing the company under private equity ownership. Doing it privately offers him the opportunity to execute without the scrutiny of sometimes fickle public market investors.
“We get to just go pedal to the metal on our cloud transformation and not worry about the optics on how the street will react to our revenue numbers. That’s a big deal and is one of the reasons why it’s better to do a cloud transformation as a private company than a public one, because the markets don’t understand it. They don’t have the patience to take a three-year view. They’d rather just see a simple straight line and not have to talk about the gyrations,” he said.
What will the future bring?
Ping hit $72 million in revenue last quarter, a $288 million run rate, and he still sees the goal as getting to $1 billion in revenue in the next five years or so, something he thinks his new investors can help him achieve.
“Our plan is to get to $1 billion. We’ve actually said that at our investor day and other things, and if you kind of follow our growth trajectory, because we have been accelerating and we’ve said, ‘Hey, by 2024, we’re a 25% to 30% grower.’ If you draw a straight line, [even without] Thoma, we get to just under a billion in five years,” he said. And perhaps with Thoma Bravo, Ping gets to that goal faster, he argued.
So what does this latest deal mean for Durand after two decades at the helm? He’s still engaged and still passionate about his job. He also sees an industry that is finally in the limelight after years of trying to raise the profile of the importance of identity in security, and he believes that there is still room to innovate and grow.
“The truth is, I do enjoy making money for people, and that includes my investors, my shareholders, my supporters, as well as my employees. I enjoy this industry. I do enjoy being relied upon as mission-critical by our customers. It seems like a worthy life mission.”
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