Nov 1, 2021 · 36m · top-founders
Coralogix Breaks $24m ARR, 2k Customers After Turning Down $40m Acquisition Offer in 2019
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In this interview with Nathan Latka, Coralogix CEO Ariel Assaraf shares how the company rebounded from three years of zero revenue and turned down a $40 million buyout offer to scale into a $24 million ARR observability and security platform.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 22.1% of the talking time here. How this is scored →
Nathan as informed peer 6.2 Guest teaching 3.4 Guest disagreement 1.6 Nathan pushing back 3.8
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 17:35 Ariel refuses to disclose exact ARR
Ariel firmly resists Latka's repeated demands to state their exact revenue numbers, playfully invoking his military background.
Hardest push from Nathan ▶ 18:18 Latka insists on pinning down monthly run rateLatka refuses to let the revenue estimate remain ambiguous, explicitly pressing whether Coralogix broke two million dollars in monthly revenue.
Biggest teaching moment ▶ 20:15 DevSecOps reality versus spending illusionAriel educates Latka on why increased security spend doesn't equate to safety because DevOps engineers lack cloud security expertise.
Nathan holds their own ▶ 24:35 Instant revenue per employee calculationLatka immediately calculates the company's revenue efficiency at $240,000 per employee and compares it against venture-backed SaaS benchmarks.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Unit 8200 Roots and Israeli Startup Culture | 5 | 4 | 1 | 2 | Latka sets the stage with references to Israeli tech founder networks before Ariel explains how the growth of observability data consistently outpaces corporate revenue. | |
| Near-Death Restructuring and First Revenue Traction | 6 | 3 | 1 | 4 | Latka drills into the early near-death metrics of the company between 2014 and 2017, confirming cash balances and restructuring details. | |
| Rejecting Buyout Offer and Raising Series A | 6 | 3 | 2 | 5 | Latka probes Ariel's equity position and the exact valuation terms when walking away from an SPA buyout to take a Series A term sheet over WhatsApp. | |
| COVID-19 Impact and Inverted Ingestion with Streama | 5 | 5 | 1 | 3 | Ariel explains the architectural breakthrough of Streama's in-stream processing without storage to secure a Series B during the COVID freeze. | |
| Series B Round Structure and Investor Alignment | 6 | 3 | 1 | 4 | Latka inspects the round mechanics and ESOP allocations while Ariel explains prioritizing patient capital over peak valuation multiples. | |
| Scaling Past Twenty-Four Million Run Rate | 7 | 2 | 5 | 8 | Latka aggressively pushes Ariel to confirm specific ARR milestones and monthly revenue figures, while Ariel uses humorous military discipline to deflect. | |
| DevSecOps Knowledge Gap and Embedded Security Consulting | 6 | 6 | 2 | 4 | Latka challenges the inclusion of consulting in a SaaS model, prompting Ariel to articulate the major skill gap among DevOps engineers handling cloud security. | |
| Enterprise Contract Values and Hundred-Thirty Percent NDR | 7 | 2 | 1 | 3 | Latka breaks down Coralogix's customer tiers, high-tier ACVs, and mathematically parses the 130% net retention into gross churn and expansion. | |
| High Headcount Efficiency and Engineering-Led Team | 7 | 3 | 2 | 5 | Latka calculates revenue per employee and investigates the secondary tender offer structured to buy out early investors. | |
| Go-to-Market Strategy, Podcast Origins, and Buyout Philosophy | 5 | 3 | 2 | 3 | Latka tests Ariel on potential hypothetical billion-dollar buyout offers and conducts the Famous Five lightning round. | |
| Reflections on Ambition and the Retirement Illusion | 8 | 3 | 0 | 1 | Ariel shares philosophical insights on how ambition shifts post-wealth, followed by Latka delivering an exhaustive recap of all metrics discussed. |
Statements from this episode (19)
Assaraf: 80% of Coralogix Board Members Are Former Military Pilots
“In our board, we actually have 80% of the board members are pilots in, in their past.”
Assaraf: Mandatory Military Service Filters Israeli Youth into Optimal Careers
“There's something when everyone has to get enlisted to the army that kind of ranks people on what they like to do and should do in life when they're 18, which makes decisions easier.”
Assaraf: Observability data grows faster than revenue at 5x to 10x
“What we tell our customers and our investors in the previous round was data grows faster than revenue. So you'll see any company you're covering, you'll notice, like you'll ask them and they'll give you the most insane KPI of growth. If you ask them how much d…”
Assaraf: Coralogix had zero revenue and zero customers for three years
“So the first three or four years, the company was zero revenue, zero customers. It was almost shut down.”
Assaraf: Coralogix had $300k and five employees at near-shutdown in 2017
“300,000 dollars.
At the end of 20 17 were five people.”
Assaraf: Coralogix reached $20k–$25k MRR within five months of restructuring
“Within the four or five months, we got to like 20, 25,000 of monthly recurring.”
Assaraf: Coralogix received tens-of-millions acquisition offer in early 2019
“We got an acquisition offer. And that was for a few tens of millions. That's beginning of 2019.”
Assaraf: Coralogix raised $10M at valuation matching buyout offer
“It was a ten million dollar round, the same valuation of the acquisition offer.”
Assaraf: Coralogix passed on higher valuations to optimize round structure
“So actually one thing that we've done in both that round and this one after was not go after the higher, the highest valuation, even when we got it. But to optimize to the structure of round that we felt that is the best for us.”
Assaraf: Coralogix would have shut down under a top US VC
“If our seed round was with like an American top VC, we would have shut down for sure. Like they shut us down. They won't even ask.”
Assaraf: TechCrunch's $400M Coralogix valuation report was roughly accurate
“We actually did not disclose any valuation to them and said that we cannot disclose but they guessed, which was roughly around the number.”
Assaraf: Most DevSecOps Engineers Are Just DevOps Engineers Given Security Duties
“So everyone talk about DevSecOps, but there aren't really many DevSecOps engineers. Many of them are just DevOps engineers that got a new responsibility to secure the cloud.”
Coralogix: Top 100 enterprise accounts average $80K-$85K ACV
“The top 100 are roughly at a 80, 85 ACV.”
Coralogix: 25 accounts pay over $100K and 5 pay over $500K
“We have 25 accounts over a 100,005 accounts over 500,000.”
Coralogix: Net retention rate exceeds 130% in 2021
“So since the beginning of this year, over a 130%.”
Latka: $240K revenue per employee is almost triple SaaS industry average
“If you've got twenty four million bucks in revenue right now, the hundred people, that's 240,000 bucks in revenue per employee, which is way it's almost triple what the average private VC backed SaaS company has.”
Assaraf: Salesforce, Confluent, and Snowflake will enter observability
“I actually mentioned that Salesforce, I think, will get in our space some way, somehow, and I think I'm fluent. We'll also step into the observability space. I think also Snowflake will get there because it's just that makes no sense for companies that control…”