Code42 Revenue & Funding (2023)

Code42's combined product revenue reached $120 million in 2022, comprising approximately $70 million from the legacy CrashPlan endpoint backup product and $50 million from the Insider platform. Following the sale of CrashPlan to a private equity firm for $250 million, Code42 retained the Insider product, which carried $50 million in ARR as of 2022.

Code42 had 800 paying customers as of late 2023. Payne emphasized that the company counts only paying customers, noting that its product requires installation of an endpoint sensor and has no product-led growth motion that would allow free users to self-onboard. Several customers pay more than $1 million per year, though Payne declined to specify the exact number, citing competitive sensitivity.

The company serves organizations ranging from 200 employees at the low end to a largest customer with more than 120,000 employees. Payne identified mid-market companies with 1,000 to 5,000 employees as the fastest-buying segment in 2023, attributing their speed to simpler internal decision-making processes compared to large enterprises, which he said were taking significantly longer to approve new technology purchases in the current macroeconomic environment.

Pricing is approximately $100 per seat per year at list, with an average realized price of roughly $80 per seat after volume discounts. A 1,000-employee customer paying $80 per seat would generate an average contract value of approximately $80,000 per year, a figure Payne confirmed on the record. Code42 uses account-based marketing and intent data tools, specifically naming 6sense, to identify and target prospective buyers. Notable named customers include Cisco, Splunk, Rapid7, Ping, Okta, and CrowdStrike. Payne noted that approximately 30 security companies use Code42 today, describing them as validation of the product given their expertise in the security space.

Code42 sells its Insider platform as an annual subscription priced per employee seat. List price is approximately $100 per seat per year, with an average realized price of roughly $80 per seat after volume discounts for large accounts. At 800 customers and an average contract value of approximately $80,000, the implied ARR is consistent with the $50 million figure Payne stated. The company charges customers upfront annually, which Payne described as highly cash efficient because a deal closed on November 30 generates a full year of cash immediately.

Code42 operates a two-team sales structure: a new business team focused exclusively on acquiring new logos and a customer success team focused on retaining and expanding existing accounts. The company uses 6sense for intent-based prospecting and account-based marketing as its primary demand generation approach. Payne said the company has 25 to 30 quota-carrying sales representatives out of a total team of 220.

Profitability was not confirmed. Payne declined to share EBITDA margin, saying only that the company is a consumer of capital in 2023 as it works through the operational separation from the CrashPlan business sold in 2022. He stated a preference for growth over near-term profitability, arguing that for a company at Code42's scale and market position, capturing market share now is more valuable than optimizing margins. He cited a 20 to 25 percent annual growth target. The company's research indicates that the average insider breach costs an organization $16 million, a figure Payne uses to frame the value proposition relative to Code42's per-seat pricing. Approximately 60 percent of employees admit to taking data from a prior employer, according to data Payne cited from Code42's own research.

Code42 employed approximately 220 people as of late 2023. Of that total, Payne estimated 25 to 30 are quota-carrying sales representatives. The company retained the majority of its workforce following the 2022 sale of CrashPlan, as Payne noted that only a small percentage of employees transferred to the buyer. This left Code42 with a headcount somewhat larger than a typical $50 million ARR company, a dynamic Payne acknowledged directly.