D.A. Davidson Announces The Herd 2023 Featuring the Top 100 Privately-Held Software Companies Globally

March 22, 2023

From rising startups to late-stage funded giants, companies in The Herd stand out for their exciting innovation, growth, and market positioning

To download a copy of D.A. Davidson’s The Herd 2023, click here.

D.A. Davidson & Co. today released its fourth annual The Herd report featuring the top 100 privately-held software technology companies based in the U.S. and globally, largely falling within D.A. Davidson’s core areas of expertise: application software, infrastructure and security software, vertical software, and financial technology. These private companies were selected based on growth, market awareness, scale, capitalization, strategic positioning, and other proprietary analytics generated by D.A. Davidson.

The Herd 2023 demonstrates our continued commitment to helping private company clients achieve their strategic and financial goals,” said Greg Thomas, Managing Director and Co-Head of the Technology Investment Banking Group at D.A. Davidson. “Since The Herd’s initial release in 2019, we’ve seen more than 40 companies go public through an initial public offering or special purpose acquisition company, and more than 25 companies exit through an acquisition by a larger strategic acquirer or high-profile financial sponsor. We expect similar stories to continue for more companies featured in the report over the next six to 12 months.”

“We believe many of the top 100 private companies featured in the 2023 edition of The Herd faced unique challenges last year. Growth-stage companies are navigating a tougher capital market environment, having to reconstruct their business to be more capital efficient and finding a more structured means to preserve the valuations set in their last round. Several ‘cross-over’ funds have shown the ability to be creative in recent months, and we expect this to accelerate throughout the year,” said Jonathan Lejuez, Managing Director in D.A. Davidson’s Technology Investment Banking Group.

The Herd 2023 sees 60 companies return to the list from last year. A key reason for the continued inclusion of many of these companies is the cooling of market forces that led to significant deal velocity for most of late 2020 and 2021. However, while deal velocity has slowed, innovation remains high.

Key findings include:

  • Companies in The Herd 2023 raised more than $57 billion in aggregate equity capital across all previously disclosed financing rounds, including $9.5 billion across 31 rounds in 2022.
  • Constituents waited a median of 15 months between their most recent rounds while demonstrating healthy step-up multiples from prior valuations at a median of 2.4x across their most recent rounds.
  • Notable rounds include Branch’s $4 billion Series F in March 2022, representing a 4x step-up multiple; Rippling’s $11.3 billion post-money Series D in May 2022, representing a 1.7x step-up multiple; and Gusto’s $9.6 billion post-money Series E announced in June 2022, representing a 2.5x step-up multiple.
  • Despite many rapid growth stories, 42% of The Herd 2023 was founded more than 10 years ago, while only two companies were founded within the last five years.
  • The Herd 2023 has continued to grow its headcount since emerging from the COVID-19 pandemic—with a median employee count of just over 1,000.

D.A. Davidson’s Technology Investment Banking Group has built a leading global platform by using our vertical expertise and extensive network, across D.A. Davidson to connect leading-edge companies with innovative sources of capital and strategic partnerships. We serve clients in an extensive range of technology subsectors, including application/vertical software, digital media and marketing technology, eCommerce/eRetail, education technology, enterprise IT, HR Tech, Blockchain, LegalTech, managed services, outsourced/IT solutions, Cyber Security, and all the various FinTech verticals. Drawing on our 20-plus years of experience and tapping into curated market maps and growth trends across the technology landscape, we help companies accelerate their growth and untapped potential.

About D.A. Davidson Companies

D.A. Davidson Companies is an employee-owned financial services firm offering a range of financial services and advice to individuals, corporations, institutions and municipalities nationwide. Founded in 1935 with corporate headquarters in Great Falls, Montana, and regional headquarters in Denver, Los Angeles, New York, Omaha and Seattle, the company has approximately 1,525 employees and offices in 28 states.

Subsidiaries include: D.A. Davidson & Co., a full-service investment firm providing wealth management, investment banking, equity and fixed income capital markets services, and advice; Davidson Investment Advisors, a professional asset management firm; and D.A. Davidson Trust Company, a trust and wealth management company.

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Software Technology Investment Banking Contacts

Greg Thomas, Co-Head of Technology and Managing Director | [email protected]
Jonathan Lejuez, CFA, Managing Director | [email protected]
Fred Johnson, Managing Director, Equity Capital Markets | [email protected]
David Douglas, Vice President | [email protected]

Senior Institutional Research Contacts

Gil Luria, Managing Director and Technology Strategist | [email protected]
Rudy Kessinger, CFA, Senior Vice President and Senior Research Analyst | [email protected]
Robert Simmons, Senior Vice President and Senior Research Analyst | [email protected]