It’s the question that Peter Bauer probably gets at minimum 10 times every 10 interviews: when are you going to float? That’s a back-handed compliment to the success he has helped build as co-founder of Mimecast, the company, now approaching its tenth anniversary, that serves about 7,500 companies or over two million corporate users in securing and storing email.
It’s still growing fast: about 40 per cent annually, says the South African entrepreneur when we meet on a warm May Day at the company’s offices in the City of London. Mimecast has $86m in committed annual subscription revenue, according to Bauer, so it’s of a size when an IPO might often be thought to be on the cards. It’s also been doing all the right things, as the UK-headquartered company has built out in the US with Bauer himself relocating to the Boston area. More than a third of revenues now come from the US compared to 55 per cent in the UK and Europe. Other indicators are good too, with a spread of verticals represented and particular strength in legal where Mimecast serves about three-quarters of the biggest UK law firms. Such is its momentum that the company is considering building its own datacentres.
So when is the float coming then? Over the course of an hour, I ask The Big Question three times and eventually I get an answer of sorts.
“It’s quite possibly in our destiny…”
“Wednesday,” Bauer deadpans, before smiling.
And then, finally, what I take to be a straight answer: Mimecast probably won’t seek a listing in the next 18 months and the reason is far more intriguing than all the froth about valuations, market cap and stock movements. It’s because the company has a strategy way beyond its current focus on secure messaging and archiving. In fact, Bauer’s ambition for Mimecast is more ambitious than almost anyone realises. He wants to build a modern equivalent to Autonomy by extracting the knowledge and contextual information from the email and document archives Mimecast holds in order to improve insight and hasten knowledge transfer.
That potential means that Bauer doesn’t want to sell out or go public too soon.
“We have a long journey ahead of us and we’ve worked hard to build a platform that crosses many categories. If you’re a company that is one feature, that’s different [but] we started with email and for thousands of companies we’re the single biggest repository of unstructured data. We think about the major stuff of where your data is, from the LAN to the cloud, and our role in facilitating that. Companies today are encountering problems with data fragmentation. That happened on the LAN but an IT guy could always go away and draw [a schematic] and find it. But the Holy Grail is making sense of unstructured data. You’ve first got to get all this data together and we think about Mimecast as an information bank where it’s safer with us and we have the technology to store it in resilient fashion and make it more useful.”
The notion of “information banking” is one that Bauer returns to repeatedly, emphasising Mimecast’s credentials for preserving the “corporate memory”. But as he suggests, the mission is to mine information from messages and documents. Emails are particularly fecund sources of information in context, he notes, because they include guides to understanding such as ‘from’ and ‘to’ fields, dates, subject lines and so on. “You don’t get that from a file system,” he says.
Mimecast has captured volumes of such information and for its next trick wants to pick the data apart for collaboration and insight.
“Autonomy had the right idea at the wrong time,” he claims. “They took live data where it was in all these heterogeneous formats and created a set of indexes, but they had very long implementation cycles. They were dealing with all these connectors and adapters and security but the idea itself is good. We say it doesn’t matter what the data is, you suck it into a central archive.”
Bauer describes Mimecast’s plans to extract contextual information as “Autonomy done right for the cloud era” but doesn’t go into deep details. However, the company in April this year released an API for e-discovery and he says he expects Mimecast to supply its own business analytics services in the next 18 to 24 months. That timing could of course tie in with a potential IPO…
Mimecast has already pulled in about $95m in funding but Bauer says it will likely require more and makes it clear that he is in this for the long term.
“When you’ve done something for 10 years the benefits accrue, we have some elite opportunities and the shift to cloud computing is still early in its journey. [At the time of the banking collapse] a lot of boards asked CFOs ‘where are our assets’. Are they with an Icelandic bank or a Spanish bank and for the first time they had to answer that question. The CIO can’t really answer the question of where’s’ the data sitting and it’s only going to get worse before it gets better.”
If Bauer can pull off the plan to make Mimecast the information bank then all that interest in an eventual market debut will scale unprecedented heights.