On Monday, Oracle announced that it bought Dyn.
Dyn is one of those old-fashioned Silicon Valley startup stories, particularly for its 35-year-old former CEO and founder Jeremy Hitchcock — only this tale took place in Manchester, New Hampshire, rather than Silicon Valley.
While Oracle didn't announce the terms of the deal, former Fortune editor Dan Primack is reporting that Oracle paid "just north of $600 million" for the company. (Oracle declined to comment on the sale price.)
That sounds like a healthy but not outlandish price — and Oracle isn't known for paying outlandishly high acquisition prices.
In May, Dyn said it was on track to exceed $100 million in billing run rate this year, Kyle York, Dyn's chief strategy officer, told BostInno. That's not the same thing as achieving $100 million in annual revenue. It means that if the current billing rate continues at the same pace for 12 months, the company will have brought in $100 million over that period.
After it raised its second round of $50 million in May, investors valued the company at $356 million, according to PitchBook. Overall, it has raised more than $100 million.
Dyn offers something called Domain Name Servers services. DNS maps the web address you type into your browser, like "www.businessinsider.com" — easier for humans to remember — into the IP address numbers that computers use.
Hitchcock and his cofounder, Tom Daly, started this company in their early 20s as a free, open-source project while attending college at the Worcester Polytechnic Institute.
It began as a server in their dorm room. They almost shut it down when they ran out of money.
"We put up a 'donate' button, but there was not much money coming in, and so we said to our users if you don't give us $25,000 in the next week we're shutting down," Hitchcock told Business Insider in 2012. "We got $40,000."
Jeremy Hitchcock talks to the troops at Dyn's offices. Dyn
Hitchcock and Daly were stunned. They realized they were now on the hook to make Dyn into a real business.
Hitchcock called up York, an acquaintance from high school living in LA, and asked him to move home to help them do marketing.
They then ran their business for 11 years without taking a dime of VC cash.
And during that time, Dyn blossomed. Today it has more than 450 people and 3,500 enterprise customers, including big names like Netflix, Twitter, Pfizer, and CNBC.
Dyn took its first VC funding, $38 million, in 2012, and Daly left the company soon after that. After raising the $50 million in VC funds in May, Hitchcock stepped down, although he retained a board seat. (Hitchcock and other Dyn executives told TechCrunch he wasn't forced out.) York is still with the company.
Hitchcock also helped establish Manchester's startup community, becoming a big angel investor and backing 17 startups, according to AngelList.
Dyn was in the spotlight last month when a massive "denial of service" attack took it down for a while, bringing down big chunks of the internet with it. Hackers didn't break into Dyn — they threw so much traffic at it that it temporarily overwhelmed Dyn.
But this attack didn't hurt its acquisition discussions with Oracle, which began before the attack, Primack reports.
Oracle plans to integrate Dyn with its cloud computing services.
Oracle likely wants Dyn for a similar reason Google spent $625 million to acquire Apigee, which had $92 million in revenue.
Oracle is far behind market leader Amazon Web Services in the infrastructure cloud computing market. Dyn gives Oracle 3,500 cloud customers to try to upsell to its other cloud services.