Eight years after selling AppDynamics to Cisco, Jyoti Bansal is pursuing an unusual merger
Jyoti Bansal, co-founder and CEO of startup Harness.
Harness
Jyoti Bansal knows about weird acquisitions.
Eight years ago, his software company, AppDynamics, was on the doorstep of a blockbuster IPO. A day before the offering, Cisco swooped in and bought the company for $2.7 billion
Now Bansal is at the center of an equally unconventional combination.
Since 2020, Bansal has been running two startups as co-founder and CEO: Harness and Traceable. The former’s technology helps companies manage code and the latter’s software observes where companies are unintentionally letting out sensitive data.
Late this month or early next, Harness and Traceable will merge. The resulting company will have 1,100 employees, $250 million in expected 2025 annualized revenue, a 50% growth rate and a valuation of about $5 billion.
“It’s about the same size that AppDynamics was when we were about to go public,” Bansal told CNBC in an interview last week.
Through the combination, Bansal said, Harness will be able to sell more products to customers, and Traceable will be better insulated from competitors like HashiCorp, which IBM has agreed to buy, and Akamai, which acquired security startup Noname last year.
This time, Bansal wants an active stock ticker.
In an interview last year with CNBC’s Make It, Bansal said he was unfulfilled after selling AppDynamics and that he didn’t finish what he had started.
“Everyone told me, ‘You should retire. Go on the beach. What else do you need to do?'” Bansal said. “That was my first instinct, as well. I wanted to trek in the Himalayas, hike Machu Picchu, do a safari in Africa, see the fjords in Norway. In six months, my bucket list was done. And I started to realize: That’s not it for me.”
Bansal got back to work and set up Big Labs, a studio for exploring startup ideas. Big Labs spawned Harness in 2017 and then Traceable in 2020. Sanjay Nagaraj, Traceable’s other co-founder, recalled working on the security startup in a dedicated Big Labs room at Harness’ San Francisco headquarters.
The arrangement was unorthodox.
“I’ve never done this before, backed a CEO to run two companies simultaneously,” said Harrick, who joined Institutional Venture Partners in 2001 and sits on the boards of Harness and Traceable. “But Jyoti is that good. He’s not only a great executive, but he hires well and he delegates well, and so I just talked to Jyoti. I said, ‘This is a major risk.’ I got his assurance he wouldn’t do a third one.”
Establishing Harness and Traceable as separate companies made sense to Bansal at the time, because their products would typically get sold to different buyers within an organization. But that’s changed in the past year or two, he said, as engineering and technology leaders have started to also make decisions on procuring tools for securing code and data.
Employees took notice of the shift and, during all-hands meetings at both companies, would repeatedly ask Bansal about a consolidation, he said. Questions also came from clients.
“The Harness team would go set up a meeting with an executive at a bank or some of our customers,” Bansal said. “I would go into the meeting and the executive would say, ‘It’s a one-hour meeting. Can we save the last 15 minutes? Because I also want to talk about Traceable.'”
Bansal was effectively the first IT person at both companies, setting up the same Google productivity apps and Carta equity management software as each got started. A spokesperson said 70% of Traceable’s largest customers are Harness customers as well.
The cultures were also similar. As Harness and Traceable matured, Bansal picked a general manager to run each distinctive new product, or module. When examining revenue for the modules, executives at both startups rely on a theory that Battery Ventures investor Neeraj Agrawal calls “triple, triple, double, double, double,” or T2D3. The model, which Agrawal wrote about in TechCrunch in 2015, describes the annualized revenue growth that cloud software startups can target.
In November, Bansal told the two boards that his companies were on converging paths and that it would be difficult to keep them from competing with each other. He got clearance for a merger.
Initially, Traceable will operate as as its own unit within Harness, the parent company, and Nagaraj will be general manager. Bansal said the structure may change in the future.
He’s confident that the technologies will pair well together and can benefit from tighter integrations. Harness will be able to help clients understand the origin of their source code, and Traceable can show how people are using it.
Harrick calls it’s a good outcome, and said he’s excited to consolidate his bet on Bansal.
“I think it’s a benefit for all investors for him to focus on operating one company instead of two,” Harrick said.
Technology
Here are the SpaceX employees who were elected to run Musk’s new company town of Starbase, Texas
The SpaceX Starship sits on a launch pad at Starbase near Boca Chica, Texas, on October 12, 2024, ahead of the Starship Flight 5 test. The test will involve the return of Starship’s Super Heavy Booster to the launch site.
Sergio Flores | Afp | Getty Images
Over the weekend, Elon Musk got his new company town along the Texas Gulf Coast. Controlling the city are three SpaceX employees, who all ran unopposed.
As NBC News reported, the election determining incorporation of the city of Starbase concluded on Saturday night, with 212 votes in favor and only six against. Just 143 votes were needed for the measure to pass.
Starbase was victorious in becoming a type C city, which in Texas applies to a previously unincorporated city, town or village of between 201 and 4,999 inhabitants. The city includes the SpaceX launch facility and company-owned land covering a 1.6 square-mile area.
The mayor is 36-year-old Bobby Peden, who has spent more than 12 years working for SpaceX and is currently vice president for Texas test and launch operations. Prior to joining the rocket maker in 2013, Peden was a graduate research assistant at the University of Texas at Austin, according to his LinkedIn profile.
Starbase has two commissioners, both from the SpaceX employee ranks.
One is Jenna Petrzelka, 39, who was an operations engineering manager at SpaceX until July, and now identifies as a philanthropist, according to her application to be on the ballot. She’s married to Joe Petrzelka, a vice president of Starship engineering and almost 14-year veteran at SpaceX.
The other commissioner is Jordan Buss, 40, a senior director of environmental health and safety for SpaceX who joined the company in 2023.
Musk, who has assumed a central role in President Donald Trump’s administration responsible for slashing the size of the federal government, began acquiring land for SpaceX in Boca Chica, Texas, about a decade ago. The first integrated Starship vehicle launched from the site, known as Starbase, in April 2023, and exploded in mid-flight.
The U.S. Fish and Wildlife Service soon disclosed details about the aftermath of the explosion, including that a “3.5-acre fire started south of the pad site on Boca Chica State Park land,” following the test flight.
State and federal regulators have fined SpaceX for violations of the Clean Water Act, and said the company had repeatedly polluted waters in the Boca Chica area. Environmental advocates and indigenous groups have also sued both the Federal Aviation Administration and SpaceX over the company’s flight tests and launch activity in the area.
Those groups said in legal filings that SpaceX caused harm to local habitat and endangered species due to vehicle traffic, noise, heat, explosions and fragmentation caused by the company’s construction, rocket testing and launch practices.
A SpaceX spokesperson didn’t immediately respond to a request for comment.
In a post on X on Saturday, the account for StarbaseTX wrote, “Becoming a city will help us continue building the best community possible for the men and women building the future of humanity’s place in space.”
WATCH: SpaceX launches third test flight of massive Starship rocket
Hinge Health’s TrueMotion feature.
Courtesy: Hinge Health
Hinge Health on Monday updated its prospectus to include the results from its first quarter, which showed accelerating revenue growth over its fourth quarter.
The digital physical therapy startup filed to go public in March, but it has not shared a price range yet. Hinge said that revenue in its first quarter climbed 50% to $123.8 million, up from $82.7 million during the same period last year. Hinge reported $117.3 million in revenue during its fourth quarter, up 44% from the same period in 2023.
Hinge said its net income for the period was $17.1 million after taxes, up from a net loss of $26.5 million after taxes during the same period last year.
The company is attempting to go public at a time of extreme economic uncertainty and market volatility, spurred largely by President Donald Trump’s sweeping tariff policy. Several companies, including online lender Klarna and ticket marketplace StubHub, have delayed their long-awaited IPOs.
Hinge’s updated prospectus signals to investors that the company is planning to forge ahead.
While the company’s revenue jumped 50%, the cost of goods sold fell slightly. That allowed Hinge to lift its gross margin to 81% from 70% a year earlier and record an operating income of $13.1 million after losing $31. 4 million in the same period a year earlier.
Hinge uses software to help patients treat acute musculoskeletal injuries, chronic pain and carry out post-surgery rehabilitation remotely. Large employers cover the costs so their employees can access Hinge’s app-based virtual physical therapy, as well as its wearable electrical nerve stimulation device called Enso.
Daniel Perez, Hinge’s CEO, and Gabriel Mecklenburg, the company’s executive chairman, co-founded the company in 2014 after experiencing personal struggles with physical rehabilitation.
Correction: A previous version of this story incorrectly stated that Q1 2025 was the company’s first profitable quarter. Hinge was profitable previously.
WATCH: IPO window likely to open in first half of 2026: PitchBook
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