MuleSoft's Ross Mason started out as a frustrated IT guy - today, he's worth over $167 million
At $17/share price, MuleSoft raised $221 million at a $2.9 million market cap, well above its $1.5 billion valuation as of its last round of private funding in May, 2015.
The company is a classic Silicon Valley tale of hard work and success by its founder Ross Mason.Mason, who turned over the CEO role a few years ago but stayed on as vice president of product strategy, remains the single largest individual shareholder.
At $25/share, his 6.7 million shares, slightly more than a 5% stake, are worth $167.3 million.
MuleSoft solves a hard problem. It lets individual apps talk to each other and share data, a tech known as application programming interfaces, and it offers these APIs as a cloud service.
It all began in 2006 when Mason was living on the Mediterranean island Malta and working as an corporate IT developer "complaining to my wife every night how stupid everything was. One day she said, stop moaning, start doing something," Mason told Business Insider back in 2013.
Every time Mason wanted one app to share some data with another app, he had to move mountains to do it. There were software tools out there like Tibco and Informatica, but they were pricey. By Mason's reckoning, enterprises were spending $500 billion a year on custom APIs each one recreating the wheel.
So he spent three years of his free time on his couch in Malta building an open-source tool called Mule that did took the "donkey work" out of working with APIs, hence the name "Mule."
A volcano changes everythingAt first, Mason was running his company from Malta, and practically commuting from Malta to the Bay Area, taking more than 30 trips in about four years, he told us. He was giving talks about Mule to developers as well as selling a commercial version to customers. All of his employees worked from their homes.
"I immediately thought a terrorist attack and 1,000 other things," he told us back then, worrying that if he didn't change his lifestyle, he was going to die in a plane crash and never see his family again. T
he problem that day wasn't terrorists. The Iceland volcano Eyjafjallajokull had erupted and had covered Europe in ash.
Still, he was stranded in San Francisco for weeks. And that's when Mason decided to move his family and company to San Francisco altogether.
Things took off for MuleSoft from there. By 2013, 150,000 developers were using Mule at over 3,000 companies (and it remains a popular open source project today) and he employed about 200 people.
Ross and team went on to launch the tech as a paid cloud service, known as AnyPoint, and by December 2016 had over 1,000 customers for it, generating $187.7 million revenue in 2016 (up from $110.3 million in 2015), and employed 841 people. It was cash flow positive (gross profit in 2016 of $138.7 million, before items like R&D, sales and marketing and G&A, with a net loss of -$49.6 million in 2016.)
did a happy dance anyway. In 2015, MuleSoft did another big raise. Its total VC investment came in at $128 million at a $1.5 billion valuation, including investments from the VC arms of Salesforce, Cisco, SAP and ServiceNow.
Mason had sold off most of his company by then, and had cashed out of about $3 million worth of equity back in 2013, before anyone had heard the term "unicorn startup." He's done a bit of angel investing since then, too.
He told us in 2014 that selling off so much to raise money is a measured gamble. "The goal is to build a really big business, so even though the stake gets smaller, even down to single digits, it's worth more as the company grows," Mason says.
On Friday, Mason's gamble clearly paid off: from a couch in Malta a decade ago, to a multi-billion company and $167 million worth of stock in an IPO.