Harness Acquires Split & Authorizes New Junior Preferred Round

On June 12, 2024, Prime Unicorn Index component Harness announced it had completed an acquisition of Split Software, a leading feature management and experimentation provider. Harness claims that, following the acquisition, “businesses will no longer need to purchase single-point solutions to meet their end-to-end software delivery requirements.”

Harness is a software delivery platform that automates the entire CI/CD process, enabling developers to deliver code faster and more efficiently. Its advanced AI and machine learning capabilities streamline deployment, increase productivity, and reduce errors, making continuous delivery seamless and reliable. The company has raised a total of $426 million, most recently raising $230 million in a Series D round, valued at over $3.2 billion, as calculated by the Prime Unicorn Index. Investors include GV, SVB, Menlo Ventures, Battery Ventures, Citi Ventures, IVP, Norwest Venture Partners, Capital One Growth Ventures, JP Morgan Chase, Unusual Ventures, BIG Labs, and ServiceNow Ventures. 

On June 11, 2024, a day before the completion of the acquisition was announced, Harness filed a Certificate of Incorporation, which disclosed a new Junior Preferred series of stock. This Junior Preferred stock was priced at $7.23, significantly lower than its Series D price of $25.11. The Junior Preferred is likely tied to this acquisition and possibly used to pay for the deal. It is worth noting that the Junior Preferred shares do not have the same rights and preferences as prior series of preferred stock, such as similar dividend rates or liquidation preferences, which can help explain its lower price. Interestingly, this round was priced closer to the company’s most recent price in the secondary markets. According to Caplight data, Harness was trading as low as $10.57 per share on November 23, 2023.