This Toronto-founded tech unicorn just went public, but it doesn’t need the money


If you’ve never heard of PagerDuty Inc., you’re not alone. In fact, according to chief executive Jennifer Tejada, a big part of the reason the company went public on the New York Stock Exchange earlier this month was to raise its profile.

The company was founded a decade ago in Toronto by three former Amazon employees who built a tool to alert software developers when their services weren’t working properly. The name comes from a practice common at Amazon years ago, when a junior programmer would be given a pager to be on call if something broke.

The initial public offering was successful, with Bloomberg reporting that the company raised US$33 million pricing shares at US$24. In its first day of trading, the shares rose 59 per cent — and the company now boasts a market capitalization just under US$3 billion.

But if it was just about money, Tejada said they never would have bothered.

Traditionally IPOs have allowed fast-growing tech companies to raise huge amounts of capital once they’ve gotten too big to raise cash from private investors. But Tejada said these days, there’s so much private capital available, companies are able to stay private for much longer, and raise much bigger venture capital rounds.

“I could raise money in a week. I mean, literally. I raised our Series D (venture capital financing). From our first presentation to cash in the bank was three weeks,” she said.

People outside the tech world will probably never use a service like PagerDuty, but there are whole armies of technical experts tasked with keeping internet services such as Uber and Amazon and Twitter running smoothly — experts who need specialized tools to do their jobs.

Tejada said selling a very specific, niche product to giant multinational enterprises meant they needed to demonstrate that they’re a serious player. She said that filing an S-1 disclosure with the U.S. Securities and Exchange Commission goes a long way toward reassuring the Fortune 500 companies to which PagerDuty hopes to sell its product.

Amazon

PagerDuty CEO Jennifer Tejada in front of the New York Stock Exchange.

Courtesy of PagerDuty

“The world doesn’t know who you are. Large enterprises who have, you know, very stringent procurement rules are concerned about your long-term viability as a company because you don’t make your financials transparent,” she said.

“Now we’re a public company and they know we’re not going to worry about making payroll next month. They can see it in the S-1.”

Originally PagerDuty created an alarm to text message or call somebody if a website or an app stopped working.

After launching in Toronto, PagerDuty’s founders moved to Silicon Valley to participate in the prestigious Y Combinator incubator program, and the company remains headquartered in San Francisco today.

But it still has strong ties back to Canada. After the three co-founders, the first employee for PagerDuty was in Toronto, and the city remains the company’s largest satellite office.

Today, the company offers a broader suite of tools and AI services for monitoring cloud-based services, routing alerts to the correct worker, and offering help to get problems fixed faster.

Tejada said that these days internet services don’t usually break, in the sense that you get an ugly error message or a blank screen. Instead, you try to press the button to order a product and you just can’t press the button, or the system takes forever to load.

“Slow is the new down. You get the spinning wheel,” she said.

“By taking this increasingly complex world, and simplify(ing) it and making it user friendly, for developers, and for people (who) will use PagerDuty, we’re elevating their work.”

• Email:[email protected]| Twitter:jamespmcleod

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