The archive · Developer & Business Tools · Strategic decision · 2010–2018
PagerDuty raised $90M at a $1.3B valuation in 2018 after passing $100M ARR
The YC S10 alerting company hit $100M ARR and raised $90M at a $1.3B valuation, betting paging was only the entry point into incident response.
PagerDuty
What the business is
PagerDuty sells hosted on-call alerting and incident management: it takes alerts from monitoring tools like Nagios and SolarWinds and reaches the right engineer by phone, app or SMS, with schedules, escalation and retries so a team's response never depends on one person's mailbox.
How it started
PagerDuty went through Y Combinator's Summer 2010 batch (YC S10) as a hosted on-call alerting service for IT teams. A commenter who met the founders at the first TwilioCon in 2011 remembered that the early product ran entirely on Amazon without redundancy — when EC2 went down, the small team itself had to man the phones and call clients to say their sites were down.
What happened
By September 2018 PagerDuty was a default in the category: commenters described consolidating remote offices onto a global corporate account, wiring it to Nagios, SolarWinds and email, and paying $29 per user per month. Two days before the round, Atlassian launched Jira Ops and acquired rival OpsGenie for $295M, and Splunk had already bought VictorOps — while commenters still pointed to a June 2018 PagerDuty outage that hit despite multiple availability zones. The company told Forbes it had passed $100M in annual recurring revenue in recent months, and on 2018-09-06 Forbes reported a $90M raise at a $1.3B valuation.
How it ended up
The 2018-09-06 round valued PagerDuty at $1.3B on the back of $100M+ ARR; the company said the money was for potential acquisitions, and commenters quoting the article said PagerDuty planned to invest in doing more with the incident data it already tracks. It remained private and live at the time.
Background
PagerDuty came through Y Combinator's Summer 2010 batch selling hosted on-call alerting: monitoring tools raise an alarm, and PagerDuty reaches the engineer who is on call by phone, SMS or app, with schedules, escalation and retries. A commenter who met the team at the first TwilioCon in 2011 remembered an early product that ran entirely on Amazon with no redundancy — when EC2 failed, PagerDuty's own people manned the phones and called clients.
The bet was that reliable paging is not a script but a service every company running software needs, and that PagerDuty could grow from that wedge into broader incident response. By September 2018 the company told Forbes it had passed $100M in annual recurring revenue, and Forbes reported a $90M raise at a $1.3B valuation; commenters on Hacker News mostly argued about whether the multiple was sane, not whether the product was real.
The round landed days after Atlassian launched Jira Ops and bought rival OpsGenie for $295M, and after Splunk bought VictorOps — consolidation that left PagerDuty as the independent category leader. The company said the money was for potential acquisitions, and commenters pointed to an article line about investing in the incident data PagerDuty already tracks, reading it as a move beyond alerting toward a data-driven operations platform.
What has to be true
- The need was universal rather than niche: virtually every company running production systems has to page someone when things break, which made alerting a less risky wedge than it looked.
- PagerDuty productized what teams hacked together: phone calls, SMS, on-call rotations, retries and multi-provider redundancy were the parts a 'couple of Perl scripts' could not reliably cover.
- Competitor consolidation cleared the field: Atlassian's OpsGenie acquisition and Jira Ops launch days earlier, plus Splunk's VictorOps deal, left PagerDuty the biggest independent on-call name.
- The financial milestone preceded the valuation: at roughly $100M ARR, a $1.3B valuation looked like 10-13x revenue to commenters, defensible for a growing SaaS category rather than bubble math.
What can be applied
On-call alerting looked like a niche teams could script, yet PagerDuty's $100M ARR and $1.3B round showed that making one boring, critical job reliable is a universal need.
Aftermath
As of 2018-09-06 PagerDuty was a private, scaling company valued at $1.3B after its $90M round; it had passed $100M in annual recurring revenue and planned to use the capital for acquisitions, with commenters describing future investment in the incident data it tracks. The Hacker News discussion mixed working engineers describing real deployments — consolidated corporate accounts wired to Nagios, SolarWinds and email — with critics citing a June 2018 outage that hit despite multiple availability zones. The thread recorded no later milestones or exit plans.
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