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Software companies are reporting a pretty good third quarter

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What a difference a week makes.

This time last week, in the wake of earnings from tech’s five largest American companies and early results from other software companies, it appeared that tech shares were in danger of losing their mojo.


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But then, this week’s rally launched, and more earnings results came in. Generally speaking, the Q3 numbers from SaaS and cloud companies have been medium-good, or at least good enough to protect historically stretched valuations when comparing present-day revenue multiples to historical norms.

This is great news for yet-private startups that have had to deal with a recession, an uneven and at-times uncertain funding market, an election cycle and other unknowns this year. Wrapping 2020 with a market rally and strong earnings from public comps should give private software companies a halo heading into the new year, assisting them with both fundraising and valuation defense.

Of course, there’s still a lot more data to come in, markets are fickle and many SaaS companies will report next month, having a fiscal calendar offset by a month from how you and I track the year. But after spending time on the phone this week with JFrog’s CEO, BigCommerce’s CEO and Ping Identity’s CFO, I think things are turning out just fine.

Let’s get into what we’ve learned.

Growth and expectations

Kicking off, Redpoint’s Jamin Ball, a venture capitalist who unconsciously moonlights as the research desk for the The Exchange during earnings season, has a roundup of earnings results from this week’s set of SaaS and cloud stocks that reported. As you will recall, last week we were slightly unimpressed by its cohort of results.

Here’s this week’s tally:

As we can see, there was a single miss amongst the group in Q3. Unsurprisingly, that company, SurveyMonkey, was also one of three SaaS companies to project Q4 revenue under street expectations. My read of that chart is seeing a little less than 80% of the group that did project Q4 guidance that bests expectations is bullish, as were the Q3 results, which included a good number of companies that topped targets by at least 10%.

Inside of the data are two narratives that I want to explore. The first is about COVID-related friction, and the second is about COVID-related acceleration. Every company in the world is experiencing at least some of the former. For example, even companies that are seeing a boom in demand for their products during the pandemic must still deal with a sales market in which they cannot operate as they would like to.

For software companies, reportedly in the midst of a hastening digital transformation, the question becomes whether or not the COVID’s minuses are outweighing its pluses. We’ll explore the matter through the lens of three companies that The Exchange spoke with this week after they reported their Q3 results.

Ping Identity

Of our three companies this week, Ping Identity had the hardest go of it; its stock fell sharply after it dropped its Q3 numbers, despite beating earnings expectations for the period.

The company’s revenue fell 3%, while its annual recurring revenue (ARR) rose by 17%. Why did its stock fall if it came in ahead of expectations? You could read its Q4 guidance as slightly soft. In the above chart it’s marked as a slight beat, but its low-end came in under analyst expectations, creating the possibility of a projected miss.

Investors, betting on Ping’s move to SaaS being accretive both now and in the long-term, were not stoked by its Q4 forecast.

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Databand raises $14.5M led by Accel for its data pipeline observability tools

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DevOps continues to get a lot of attention as a wave of companies develop more sophisticated tools to help developers manage increasingly complex architectures and workloads. In the latest development, Databand — an AI-based observability platform for data pipelines, specifically to detect when something is going wrong with a datasource when an engineer is using a disparate set of data management tools — has closed a round of $14.5 million.

Josh Benamram, the CEO who co-founded the company with Victor Shafran and Evgeny Shulman, said that Databand plans include more hiring; to continue adding customers for its existing product; to expand the library of tools that its providing to users to cover an ever-increasing landscape of DevOps software, where it is a big supporter of open source resources; as well as to invest in the next steps of its own commercial product. That will include more remediation once problems are identified: that is, in addition to identifying issues, engineers will be able to start automatically fixing them, too.

The Series A is being led by Accel with participation from Blumberg Capital, Lerer Hippeau, Ubiquity Ventures, Differential Ventures, and Bessemer Venture Partners. Blumberg led the company’s seed round in 2018. It has now raised around $18.5 million and is not disclosing valuation.

The problem that Databand is solving is one that is getting more urgent and problematic by the day (as evidenced by this exponential yearly rise in zettabytes of data globally). And as data workloads continue to grow in size and use, they continue to become ever more complex.

On top of that, today there are a wide range of applications and platforms that a typical organization will use to manage source material, storage, usage and so on. That means when there are glitches in any one data source, it can be a challenge to identify where and what the issue can be. Doing so manually can be time-consuming, if not impossible.

“Our users were in a constant battle with ETL (extract transform load) logic,” said Benamram, who spoke to me from New York (the company is based both there and in Tel Aviv, and also has developers and operations in Kiev). “Users didn’t know how to organize their tools and systems to produce reliable data products.”

It is really hard to focus attention on failures, he said, when engineers are balancing analytics dashboards, how machine models are performing, and other demands on their time; and that’s before considering when and if a data supplier might have changed an API at some point, which might also throw the data source completely off.

And if you’ve ever been on the receiving end of that data, you know how frustrating (and perhaps more seriously, disastrous) bad data can be. Benamram said that it’s not uncommon for engineers to completely miss anomalies and for them to only have been brought to their attention by “CEO’s looking at their dashboards and suddenly thinking something is off.” Not a great scenario.

Databand’s approach is to use big data to better handle big data: it crunches various pieces of information, including pipeline metadata like logs, runtime info, and data profiles, along with information from Airflow, Spark, Snowflake, and other sources, and puts the resulting data into a single platform, to give engineers a single view of what’s happening better see where bottlenecks or anomalies are appearing, and why.

There are a number of other companies building data observability tools — Splunk perhaps is one of the most obvious, but also smaller players like Thundra and Rivery. These companies might step further into the area that Databand has identified and is fixing, but for now Databand’s focus specifically on identifying and helping engineers fix anomalies has given it a strong profile and position.

Accel partner Seth Pierrepont said that Databand came to the VC’s attention in perhaps the best way it could: Accel needed a solution like it for its own internal work.

“Data pipeline observability is a challenge that our internal data team at Accel was struggling with. Even at our relatively small scale, we were having issues with the reliability of our data outputs on a weekly basis, and our team found Databand as a solution,” he said. “As companies in all industries seek to become more data driven, Databand delivers an essential product that ensures the reliable delivery of high quality data for businesses. Josh, Victor and Evgeny have a wealth of experience in this area, and we’ve been impressed with their thoughtful and open approach to helping data engineers better manage their data pipelines with Databand.”

The company is also used by data teams from both large Fortune 500 enterprises to smaller startups.

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WhatsApp is upping its wallpapers and stickers game

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WhatsApp is finally upping its wallpapers and stickers game.

The instant messaging service said on Tuesday that it will now allow users to set custom wallpapers for different chats in a bid to make it easier for users to easily distinguish the dozens or hundreds of chats they are simultaneously engaging with. There’s no limit on how many custom wallpapers a user could choose to assign to different chats, it said.

“Make your chats personal and distinguishable by using a custom wallpaper for your most important chats and favorite people, and you never need worry about sending the wrong message in the wrong chat ever again,” the Facebook -owned service said.

WhatsApp, used by over 2 billion users, is also rolling out doodle wallpaper — the default wallpaper currently — in more colors, and is bulking up the selection of wallpapers with more images of nature and architecture from around the world, it said. Additionally, users can now also set a separate wallpaper which activates when their phone switches from light to dark mode.

Moving on from wallpapers, the messaging app said it is also making it easier for users to quickly search and find stickers with text or emoji, or browse through common categories.

The firm urged sticker creators to tag their stickers with emojis and text moving forward so that their stickers become more easily searchable for WhatsApp users. A company spokesperson declined to share the kind of traction stickers have received on WhatsApp, or how many sticker creators have contributed.

But if stickers are something you enjoy, there are some additional ones you will spot today. The World’s Health Organization’s “Together at Home” sticker pack is now available as animated stickers. (The two began collaborating earlier this year to raise more awareness about the coronavirus pandemic.)

“Together at Home has been one of the most popular sticker packs across WhatsApp, and will now be even more expressive and useful in its animated form. The ‘Together at Home’ sticker pack is available within WhatsApp, including with text localized for 9 languages – Arabic, French, German, Indonesian, Italian, Portuguese, Russian, Spanish and Turkish,” WhatsApp said.

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Google Play’s Best of 2020 Awards highlight the stressful year it’s been

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Continuing its annual tradition, Google today announced its Best of 2020 awards — the company’s list of the best apps, games, movies and books for the year. Not surprisingly, the top apps picked by both Google Play users and editors reflect the stressful year that 2020 has been, with a top sleep app, Loóna, winning the title of “Best App” of 2020. Meanwhile, Google Play users picked streaming service Disney+ as their choice.

Loóna is a fitting app to win the award this year. The sleep aid promises a mood-altering experience that helps its users deal with the negative emotions that accumulate during the day and are then processed during sleep. As anxiety and stress grow, people’s sleep patterns and REM sleep be disrupted, Loóna explains. To combat this, its app offers nightly “sleepscapes,” that combined activity-based relaxation, storytelling and sounds to help people shut out their stress and relax.

Unlike other sleep or meditation apps where users close their eyes and drift off, Loóna is intended to help people wind down while still on their phones. Users tap to color images while the sleep story plays. The company also this year introduced music playlists, called soundscapes.

Image Credits: Loóna

In October, the company reported its app — which is also available on iOS — was seeing daily average time spent of 34 minutes from its subscribers. And its average conversion rate from trial to paid subscriber was 52.5%. With version 2.0, Loóna plans to reposition its app from being solely focused on bedtime relaxation to become a broader mood management app that also covers the sleep to wake up cycle, among other things. It also plans to add personalized content recommendations.

In addition to Loóna, Google Play editors selected the free-to-play action role-playing game Genshin Impact as the year’s best game for giving players a “wondrous world to explore” while unraveling mysteries. The game, miHoYo’s first-ever open-world game, features battles with elemental magic, character switching, and gacha game monetization for obtaining new characters, weapons, and other additions.

Google Play users, however, selected SpongeBob: Krusty Cook-Off as the year’s best game.

Another app that benefitted from coronavirus lockdowns was Disney+, which won this year’s User’s Choice award for Best App. The streaming service helped families stuck at home to keep their kids entertained. Plus, with new shows like the “The Mandalorian,” the service has been a hit for adults in the family, too.

In addition to the top winners, Google gave a shout-out to a few other notable titles in its announcement, including Chris Hemsworth’s training app Centr, behavioral modification app Intellect, as well as games like The Gardens Between, Harry Potter: Puzzles & Spells, and Sky: Children of the Light.

The Play Store also awarded various gaming subgenres with awards of their own, like best competitive games, best indies, best pick up and play, and best game changers. These winners include Brawlhalla, Bullet Echo, GWENT: The Witcher Card Game, Legends of Runeterra, The Seven Deadly Sins: Grand Cross, Cookies Must Die, GRIS, inbento, Maze Machina, Sky: Children of Light, Disney Frozen Adventures, DreamWorks Trolls Pop, EverMerge, Harry Potter: Puzzles & Spells, SpongeBob: Krusty Cook-Off, Fancade, Genshin Impact, Minimal Dungeon RPG, Ord., and The Gardens Between.

Other top apps won awards in categories like best everyday essentials, best for personal growth, best hidden gems, best for fun, and best apps for good. These app winners include Calmaria, Grid Diary, The Pattern, Whisk, Zoom, Centr, Intellect, Jumprope: How-to Videos, Paird: Couples App, Speekoo, Cappuccino, Explorest, Loóna, Paperless Post, Tayasui Sketches, Bazaart, Disney+, Dolby On, Reface, Vita, GreenChoice, Medito, and ShareTheMeal.

Movies that won “Best of” for 2020 included Bill & Ted Face the Music, Just Mercy, Miss Juneteenth, Onward, and Parasite; while book winners included A Promised Land by Barack Obama, The City We Became by N.K. Jesmin, Riot Baby by Tochi Onyebuchi, Solutions and Other Problems by Allie Brosh, and You Had Me at Hola by Alexis Daria,

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