As 2020 draws to a close, we’re pleased to recognize another private company achieving the $100 million annual recurring revenue (ARR) benchmark. In fact, we have one and a half companies to highlight.

Before we focus on Nexthink and acknowledge Coalition’s progress, let’s discuss the types of startups we’ll be tracking in 2021.

The compilation of companies reaching $100 million ARR occurred somewhat organically, stemming from a period of news coverage coinciding with my return to TechCrunch. Upon revisiting our content management system, this group of recently profitable businesses was readily apparent.

However, analyzing companies with $100 million ARR proved less insightful than initially anticipated. The exercise largely identified businesses poised for an initial public offering.

This potential outcome was noted previously, as we stated:

This represents our focus for 2021.

If your startup is nearing $50 million ARR, or achieving a $50 million annual run rate, we are interested in learning more. Please reach out if your privately held startup has an annualized run rate between $35 million and $60 million and you’re open to discussing its growth trajectory. (The Exchange initially introduced this concept in November.)

The Exchange delves into startups, markets, and finance. Find it each morning on Extra Crunch, or subscribe to The Exchange newsletter on Saturdays.

Looking ahead, let’s examine Nexthink, explore the concept of “digital employee experience,” and understand how cyber insurance is contributing to Coalition’s substantial growth.

Nexthink Prepares for Initial Public Offering

Nexthink is a privately funded software company with its main offices located in Lausanne, Switzerland, and Boston. The company secured funding in relatively small amounts between 2006 and 2014, at which point it obtained a $28.6 million investment, categorized by Crunchbase as a corporate investment.

This funding round represented the first time the company received more than $10 million in a single investment. (Update: This section has been revised to accurately represent Nexthink’s funding history, as a previous data source presented information differently.)

Following this, Nexthink experienced success through venture capital, likely growing rapidly as it completed two further funding rounds in 2016 and 2018, raising approximately $40 million (Series B) and $85 million (Series C), respectively. PitchBook data indicates that Nexthink’s valuation exceeded $558 million (post-money) after its 2018 funding round.

What enabled the company to attract such significant external investment? By developing digital experience management software. After some investigation, this appears to be software designed to monitor how employees utilize devices within a corporate setting and assess the performance of software operating on those devices.

While digital experience monitoring seems focused on enhancing device performance rather than tracking user activity, it does appear to be a comprehensive system. In Nexthink’s approach, a software component is installed on company-owned devices, collecting data regarding device performance. This data can be viewed for individual devices or compiled into overall company-wide reports.

Which organizations would benefit from this? Large enterprises, presumably, that invest heavily in hardware and employee time and aim to ensure no time is lost due to poorly functioning devices.

It is also important to note that Nexthink provides tools to assist remote employees, a crucial area in 2020. Consequently, the company recently announced it had surpassed $100 million in Annual Recurring Revenue (ARR) this quarter.

This revenue achievement, and the potential for an IPO, is likely a positive outcome for its investors, including VI Partners, Auriga Partners, Highland Europe and Index Ventures. Even using current SaaS valuation multiples, Nexthink’s worth is considerably higher than its last private valuation.

The question of whether Nexthink will launch its IPO in Europe or the United States remains open. We may have an answer sometime next year.

Finally, we will conclude with a look at another insurtech company.

Coalition

At the beginning of achieving $100 million in Annual Recurring Revenue, we included Lemonade and MetroMile in this group. Considering our increased understanding of the insurance sector since the beginning of 2020 – a period of significant activity in insurtech that highlighted the importance of loss adjustment expenses within loss ratios – we likely wouldn’t make the same selections today if we were starting anew with our current knowledge.

However, it isn’t entirely equitable to other companies operating in the same market. Therefore, let’s incorporate Coalition into the list. This company provides cybersecurity insurance and, as reported by Forbes, “has achieved $100 million in annualized premium revenue [this fall], an increase from $50 million the previous year.”

TechCrunch previously reported on Coalition’s $90 million Series C funding round earlier this year, noting that the “startup shared with [this publication] that [it] had expanded its customer base to 25,000, representing a 600% increase from ‘the year before.’”

It’s understandable why cyber insurance is experiencing a period of growth. Cybersecurity, in general, has seen substantial advancement in 2020, which naturally leads to increased demand for cybersecurity liability coverage. In reality, I’m somewhat surprised Coalition’s gross written premium run rate didn’t increase by more than 100% over the last year, considering its customer acquisition rate.

Nevertheless, if we’re including Coalition on this list, Hippo also satisfies the necessary requirements. So, Hippo will be added as well. (It’s clear why this series is ongoing.)

With that said, this concludes the current assessment. A year and almost two weeks have passed since the initial start. We will observe which companies emerge next year.