Scott Davidson, the newly appointed chief operating officer at data analytics software maker Alteryx Inc., says his growth plans for the closely watched technology company could include partnering, licensing and potentially more acquisitions.
The Silicon Valley veteran, who becomes the first COO at Orange County’s fastest-growing large publicly traded company, told the Business Journal the big data company has done a “fantastic job of finding product market fit” as its expansion roars ahead.
“We will evaluate all avenues to expand our offerings, broaden market presence and continue to scale the company—“acquihire” is one potential element of executing on these plans,” he said.
Acquihire is the process of buying a company primarily to recruit its talented staff.
“Those are the key areas I’ll start with,” said Davidson, who joined the company on Dec. 2, and noted that it was too soon for him to put forward concrete proposals.
“I’m just sort of learning where we are internally, so I haven’t really formulated a thesis as to what the perfect portfolio would look like here as of yet.”
Davidson’s own hiring is the latest notable news for Alteryx (NYSE: AYX), whose busy 2019 has seen rapid sales growth, notable stock swings, a few modest-sized acquisitions, and plans for a new headquarters in Irvine to support more local hiring.
Silicon Valley, Vinny Smith
Davidson has been close to the tech venture community in Silicon Valley, so he understands “who’s who in the zoo in terms of the number of companies and who’s doing what.”
OC was already home to Davidson; he counts a Newport Beach home and commuted to his last job at Santa Clara-based data software maker Hortonworks, where he was CEO and COO.
He’s also held financial leadership roles at Aliso Viejo’ Quest Software, where he worked with OC billionaire investor Vinny Smith, and at Citrix Systems.
“I know him very well,” Davidson said of Smith. “I was his CFO for a number of years.”
Smith’s Toba Capital, OC’s largest venture capital firm, was an early investor in Alteryx (NYSE: AYX), which went public in 2017 at a stock price of $14.
Its shares reached a high of nearly $148 this summer, putting co-founder and Chief Executive Dean Stoecker in the ranks of billionaires, before slipping in the latter half of the year—its shares took a nearly 15% tumble in mid-December.
The firm’s shares counted a price of about $100 late last week, giving Alteryx a market value of some $6.5 billion.
Skating Ahead
In terms of strategy, the 54-year-old Davidson aims “skate to where the puck is headed versus where it is” at Alteryx.
The company racked up $253.6 million in sales last year, and predicts this year will show a revenue jump to about $390 million.
The Alteryx analytics platform allows data workers to turn huge amounts of data into actionable business solutions, providing one analytic process and enabling users to share insights, apps, and models across their organizations.
It has more than 5,600 corporate customers, ranging from banks to retailers to restaurants.
The firm now employs some 1,200 people, including about 260 in Irvine, where a forthcoming headquarters move to the just-opened Spectrum Terrace office campus will allow for additional hiring.
“The recruiting engine, the development engine and the organization around its people are critical areas for me to pay initial attention to,” Davidson said.
“The information technology aspect of the business is also exceedingly important given that we operate within the data world, even though we don’t touch customer data,” he said. “We have to be able to continue to develop our security posture and be a thought leader around that.”
The company has taken relatively small steps this year, in terms of acquisitions.
Alteryx said in October it had bought Feature Labs, a machine learning and artificial intelligence software firm launched from the Massachusetts Institute of Technology. It paid $25.5 million in cash for the company, with another $12.5 million in potential earnouts.
Stoecker’s Successor?
The COO’s appointment immediately raised questions as to whether he may be in line to succeed Stoecker.
The short answer is no, Davidson said.
“I don’t think it was designed with that as a core element,” he said. “It honestly wasn’t something that I thought about.”
Davidson adds, “I think Dean’s quite happy and frankly the most adept to continue that path as leader of the company.”
Stoecker said that Davidson’s focus will be in building out and integrating a new “operations center” for the company, comprised of corporate development, information technology, enterprise applications and human resources.
Strategic Context
Davidson emphasizes he will be working “in concert” with the financial model set forth by Chief Financial Officer Kevin Rubin and with Stoecker “within the strategic context.”
Alteryx says it doesn’t have a formal ranking of executives. Davidson will report directly to Stoecker as do nine other “C-Level” leaders including President and Chief Revenue Officer Scott Jones.
“I know Scott from his Hortonworks days and I think he’ll be a great fit for Alteryx,” Rishi Jaluria, a senior research analyst at D.A. Davidson & Co., told the Business Journal.
