Samsara is a company that has raised lots of private capital at rather high prices. Back in 2018, for example, TechCrunch noted that the IoT platform company had raised $100 million at a $3.6 billion valuation.
Now that Samsara is going public, we were curious whether it would manage to best its prior private valuations. The answer appears to be an easy yes.
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According to a new SEC filing that dropped this week, Samsara expects to price its IPO between $20 and $23 per share, likely valuing the San Francisco-based company at a multiple of its final private price set in 2020.
This morning, we’re comparing its private worth and potential public value. Then we’ll do some work to better understand Samsara’s revenue multiples and what its value can tell us about its market. If you want a deeper dive into the mechanics of Samsara’s business, we have you covered here. Today we’re more interested in the resulting numbers, not how they were achieved.
Let’s go!
What’s Samsara worth at $23 per share?
A lot, it turns out. Per the company’s latest S-1/A filing, Samsara expects to have 505,604,713 shares outstanding after selling 35,000,000 shares in its IPO and reserving 5,250,000 shares for its underwriters to purchase if they so choose.
The company’s simple IPO valuation range, then, stretches from $10.1 billion to $11.6 billion.
If we are slightly more generous with our share count, the resulting valuations rise. On a fully diluted basis, Renaissance Capital calculates that at $21.50 per share, its midpoint, Samsara is worth $11.6 billion. Extrapolating modestly, at $23 per share, the fully diluted valuation of Samsara comes to around $12.4 billion.
Given that the company last raised in mid-2020, putting a $5.4 billion price tag on its value, per Crunchbase data, no matter where it prices or how we count shares, Samsara is set to crush its final private price.
Now, is Samsara expensive at those valuation marks? Let’s find out.
By the numbers
In its October 30, 2021, quarter, Samsara generated revenues of $113.82 million. That figure was up 72% from its year-ago quarter, and puts Samsara on a $455.3 million run rate, rounding slightly.
From the bottom of its simple IPO valuation range ($10.1 billion) to the top of its fully diluted IPO valuation interval ($12.4 billion), Samsara will command a run-rate multiple of 22x to 27x, once again rounding somewhat.
Those are not cheap multiples, but not incredibly expensive, either. Certainly, we have seen software multiples contract in recent quarters, but high-growth software companies — like Samsara — can earn far-greater multiples of their revenues in today’s public market.
Not to get ahead of ourselves, but if Samsara raised its range or priced above its current interval, we would not be utterly shocked. We’ll have to wait and see, of course.
Still, the Samsara IPO in its current form teaches us a few things:
- Many 2020 prices that private-market investors paid for unicorns were dramatically lower than what the public markets were willing to pay a few quarters later; venture capitalists are getting mega-returns for limited work, at least in terms of the holding period of the last checks into companies like Samsara.
- Despite valuation declines for many public software companies, unicorns that have strong growth profiles can still crush preceding private-market valuations when they do debut.
- Mucking about with hardware is not public-market anathema.
More when it prices formally, but don’t forget that we have HashiCorp and Nubank going public in short order. It’s not clear at this juncture whether we’ll see Samsara price and trade before the holidays, but I’d reckon that we will. More when we have it!
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