So lots of folks talk about GitLab as a leader in software development and devops, but GitLab also has sort of a quieter cousin that also IPO’d: JFrog.

JFrog started off as the #1 binary repository and has expanded from there as a multi-product suite for software development.  Fast forward to today, it’s at $270m ARR, growing an impressive 39% a year, and generating positive cash flow.

Pretty darn impressive.  Yet, the markets are down for everyone, and Jfrog is only worth $2.2 Billion as I type this.  Well below 10x ARR, even for a leader growing almost 40% at $270,000,000 in ARR.   It should be worth more.  Almost everything is going well in SaaS and Cloud these days — except multiples.  Multiples are brutal.  Hopefully, they’ll bounce back at least a bit in 2023.

5 Interesting Learnings:

#1.  132% NRR, going up, with a stunning 97% GDR.  With GDR like that, basically no one leaves JFrog.  Very impressive,

#2.  JFrog’s customers triple their spend over the first 3 years.  They take some time to add more products and usage, but it’s consistent and steady.  A real force of nature over time:

#3.  Almost all customers (94%) buy more than one product.  Expanding beyond Artifactory is key.  JFrog is also synonymous with its initial product, Artifactory.  But it’s not enough to hit the scale and growth rate they’ve achieved.  Fast forward to today, 94% of their customers are multi-product.

#4.  $100k+ customers are the engine now.  We’ve seen this before.  They’re up 56% year-over-year to 647 customers.

#5.  Channel model and organic approach to SMB and mid-market yields a fairly efficient Sales & Marketing motion.  JFrog does have a significant dedicated sales team, but mainly focused on $100k+ deals. It uses a cost-efficient channel strategy for some of its smaller customers, along with an inbound-focused model for smaller deals.  Together, it means they only spend 38% of revenue on Sales & Marketing.  That’s fairly efficient.

JFrog.  There’s not much to not like here! 🙂  Consistent growth, insanely high GRR, almost no churn, and deal sizes going up.  Boom!

Maybe they could be a little less quiet, though. 🙂

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