After far too few startups appeared ready to take advantage of warm public market conditions and ecstatic IPO receptions, a deluge of private companies filed to go public yesterday.
There was Sumo Logic in the morning and JFrog a bit later on. Unity filed in there as well. Snowflake also dropped, along with Asana later in the day. If you were dog-tired just reading Twitter, we understand. This morning, we’re going to catch you up on the key facts from each offering.
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But we’re not going to discuss every recent IPO filing. We’re not including Xpeng, a Chinese electric vehicle company that feels a bit afield from the largely SaaS cohort that just went public (more on it here, if you’d like). Or Amwell, which does health stuff. And we’re going to leave Corsair, a gaming hardware company that’s going public, alone as well.
We have to focus, so we’re niching down to the most traditional venture capital and startup fare on offer. It’s not like we’ll lack for things to say. What follows is a digest of basic facts and IPO details just for you.
Five IPOs and Alex’s funeral
For each company, we’ll discuss what they do, how much they have raised, their initial IPO raise expectations and their financial performance. We’ll wrap with valuation notes as we can.
In alphabetical order, then:
- Asana provides a team-focused task-management service. In competition with startups like Monday.com, Asana has raised $213.5 million, according to PitchBook data, along with around $210 million in debt most recently. The company is pursuing a direct listing, so it does not have a traditional IPO raise target. You can read its filing here.
- In terms of results, Asana effectively doubled in size from its fiscal year ending January 31, 2019 ($76.8 million) to the same period of 2020 ($142.6 million). Losses more than doubled, rising from $50.9 million to $118.6 million over the same period. In its most recent quarter ending April 30, 2020, Asana saw its revenue grow from $28 million to $47.7 million, or just over 70%. That pace of growth is attractive to investors hunting for equity in expanding companies. However, Asana lost $35.8 million in the three-month period, more than twice what it lost in the year-ago quarter ($15 million).
- Strip out debt costs ($7 million) and share-based comp expenses ($4 million) and the quarter looks better, but Asana is spending heavily to grow. Whether it is profligate is hard to say, given present-day SaaS revenue multiples. Asana had “dollar-based net retention” of 120% in its fiscal 2020.
- Our take? It’s great to see Asana go public via a debt-powered direct listing. It’s a fun model. The company also loses more money than we anticipated despite its winsome growth rate.
- Devops-focused JFrog works with code storage, automation, distribution and more. Its product suite has proved attractive to customers and investors alike, with the California-based company raising $228 million while private, according to PitchBook data. JFrog is pursuing an IPO with a placeholder sum of $100 million. You can read its filing here.
- In terms of results, JFrog is growing at a decent clip and, notably, is profitable in its most recent quarter. In 2018, JFrog lost around $26 million against revenue of $63.5 million. In 2019 its losses fell to $5.4 million while its revenue grew to $104.7 million. In the quarter ending June 30, JFrog grew from $24.9 million in the year-ago period to $36.4 million, a gain of 46.3%. That’s pretty good for a company going public, but JFrog managed to generate $1.7 million in profit during the June 30, 2020 quarter as well. How often do we see that?
- With 80%+ gross margins, JFrog is an attractive financial package. Sure, it could be growing marginally more quickly, but with profits and strong revenue quality it’s hard to find fault with the company. Notably JFrog could direct list if it wanted. It has over $170 million in cash at the moment. But, why not raise a bit more?
- Data storage and management-focused Snowflake has proved a capital magnet thus far in its life, raising north of $1 billion as a private company, according to Crunchbase. At its most recent Series G price, Snowflake was worth more than $12 billion. Given that fact, it’s odd that the company has a mere $100 million IPO raise placeholder scribbled down. Regardless, you can read its filing here.
- In terms of results, Snowflake is growing quickly and losing lots of money. In the fiscal year ending January 31, 2020, Snowflake had revenues of $264.7 million, up 173.7% from $96.7 million in the preceding fiscal year. During the same periods, however, the company’s net losses soared from $178 million to $348.5 million.
- Recently things have calmed down a little, with Snowflake posting $133.1 million in its July 31, 2020 quarter and just a $77.6 million net loss. That’s a net loss worth 58% of revenue, down from 131% in its fiscal year ending January 31, 2020. Snowflake’s cash consumption has also fallen in recent quarters.
- As TechCrunch wrote yesterday, Snowflake’s gross margins have steadily improved over time, though their lower-than-SaaS levels underscore the fact that Snowflake is offering a platform-as-a-service product instead of a software service. How that fact may impact its eventual valuation will be interesting to see.
- All told, Snowflake is a big, quickly growing, expensive machine that is about to raise a lot more cash to keep powering ahead.
- Sumo Logic was the topic of this column yesterday, so here we’ll allow ourselves some indulgent self-quoting.
- In the “years ending January 2018, 2019 and 2020, Sumo Logic reported revenues of $67.8 million, $103.6 million and $155.1 million. [ … ] those work out to 53% and 50% growth apiece, good numbers for a company now comfortably into the nine-figure annual revenue range.”
- More recent results: “In the quarter ending April 31, 2020, Sumo Logic posted $47.2 million in revenue, 45% ahead of its year-ago revenue result of $32.5 million. Growth, then, is slowing at the company at a goodly clip, at least in percentage terms.”
- Turning to revenue quality: “The company’s revenue had a blended gross margin of 69.4% in its most recent quarter, down slightly from its last fiscal year’s full-year result of just over 71% and down even more from its same-quarter 73% in the year-ago period. That’s not a great trend to have in hand while going public.”
- Sumo Logic got quickly lost in the mix yesterday, but with a history of having raised north of $300 million, it’s still a big IPO with a lot of backers crossing their fingers. You can read its filing here.
- Unity is a gaming platform company that supports both desktop and mobile games. The company claims that around 50% of all mobile, PC and console games are made using its engine. For more on the company’s listed take on the Epic-Apple situation, head here.
- You can read its filing here. Unity raised just under $700 million while private, according to PitchBook data, and was valued last at nearly $6.3 billion.
- In 2018 Unity lost $131.6 million against $380.8 million in revenue. In 2019 those numbers grew to a loss of $163.2 million against revenues of $541.8 million. So, a slightly higher net loss, though one that was a smaller percentage of its revenue. More recently, in the first half of 2020, Unity’s revenues have grown from $252.8 million in the year-ago period to $351.3 million. Its losses fell to $54.1 million from $67.1 million in the year-ago H1.
- Unity has over $453 million in cash, and just $124.4 million in debt. Its IPO filing lists a $100 million placeholder raise figure, so we’re in the dark regarding how much capital it might want to raise.
- With rising revenues, a gaming boom, good gross margins and falling net losses Unity should make quite a splash when it debuts, provided that it prices intelligently.
Whew! Got all of that? Good. Now you are prepped. More when they price!
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