Raleigh software company Pendo nears 1,000 workers worldwide, as new downtown HQ opens
Fast-growing Raleigh software startup Pendo plans to continue its hiring binge in 2022, saying Thursday it plans to hire around 400 more employees worldwide this year.
The further expansion comes as the company opened its new headquarters in the Raleigh Crossing tower on Hillsborough Street, where it leases five floors. The startup hired roughly 500 people last year, bringing its headcount to nearly 900 employees, Pendo said. In addition to Raleigh, Pendo has offices in San Francisco, Tokyo, Australia, England and Israel.
“Pendo is growing up,” Todd Olson, Pendo’s CEO and co-founder, told The News & Observer.
“We are a company inarguably in transition from a startup to a more established growth business,” he added, “and we are having to level up.”
Pendo, which makes software that helps companies collect data on how customers use their products and websites, is one of Raleigh’s most prominent startups over the past decade.
The company raised $150 million from investors last summer, a sum that spiked its valuation to $2.6 billion, The News & Observer previously reported. That made it the third most valuable startup in North Carolina, according to an N&O analysis.
Competition for talent
The company’s growth is the latest sign of a surging tech economy in the Triangle, where companies, ranging from Apple to just-formed startups, are competing for talent.
Olson said that has made it harder than ever to hire. Though, in the past year, it has doubled its sales staff and brought on several new executives with experience at larger tech companies.
“The talent market is crazy right now. There is no other word,” he said. “It is an all out war for talent. You can’t let up.”
Olson said Pendo used to have around 90% of its offer letters accepted by candidates, but that figure has dropped. “Existing employers are countering in ways we haven’t seen before,” he said. “But you really can’t slow down at all. If you slow down you get behind. We need people to achieve our goals.”
Olson said it has seen strong growth in software that allows companies to see how employees use workplace software, a service that has become more popular as businesses increasingly have employees scattered around the world.
Pendo now has more than 2,300 paying customers using its software, including Shutterstock, Accuweather, Calendly and the American Cancer Society.
Last year, the company said it hit a milestone of $100 million in annual recurring revenue, a figure that tracks how its subscription-based business is doing.
The company did not reveal an exact revenue number in its annual update, but said it had 60% year-over-year revenue growth. Olson said the company still has a lot of room to grow, especially as it begins to gain traction in markets like Japan and Australia.
That growth can be seen in Pendo’s new office in downtown Raleigh, where workers are slowly returning. The company occupies four floors of the building, with one floor reserved for future growth.
The new office offers sweeping views of downtown Raleigh via floor-to-ceiling windows, a pop-up coffee shop from 321 Coffee and a commercial pizza oven. Famed Raleigh restaurateur Ashley Christensen consulted the company on the oven, which is the same model she uses at Poole’side Pies.
Olson said the office is still important to Pendo, despite the growth in distributed work because of the pandemic. That’s a sentiment shared by many of the Triangle’s fastest-growing tech companies. Several technology companies in the region have invested heavily in their offices, even as the pandemic has caused many workers to demand flexible working locations. Raleigh-based Bandwidth and Cary’s Epic Games are all notably building large headquarters at the moment. Apple and Google are also investing heavily in Triangle offices.
Pendo will hire remote employees, Olson said, but it is typically rare. Pendo would prefer an employee is located near one of its hub offices.
“This is why we special attention to our office space,” he said. “Some people are looking for the experience.”
The company is also considering whether to open more hub offices across the U.S. to give it access to more talent, Olson said.
Plenty of cash in the bank
Pendo has long been seen as a likely candidate to become the Triangle’s next publicly-traded firm, following the path of Red Hat, and filing an initial public offering. At one point, Olson said an IPO could happen later in 2022.
However, the stock market has been in turmoil in recent months, and tech stocks have seen their valuations slashed on the public markets.
The stock market “does inform how we work with capital markets,” Olson said. “The good news is that we have plenty of cash in the bank. We don’t need capital. While the markets and multiples have come down, we don’t need to worry about that.”
Olson said Pendo has enough cash on hand that it likely won’t need additional funding until sometime in 2023. Whether that comes via a public offering or more venture capital remains to be seen.
“Market conditions can definitely impact IPO timing,” Olson said. “All I can do is prepare the company for the next phase. If markets are in a satisfactory place, we will take advantage of it. But we can always wait until the timing is right. We have no pressure. This is something we have the luxury of choosing.”
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate.
This story was originally published February 24, 2022 at 9:00 AM.
