Go public now while software valuations make no sense, Part II – ClearTips
On August 5, ClearTips wrote that startups “should go public while software valuations make no sense.” What came next was a happy coincidence. Just a few weeks after that post, Unity, Geoffrog, Asan, Snowflake and Sumo Logic all filed to be made public.
Today we’re looking at some of those figures, especially the incredibly strong pricing runs from both JFrog and Snowflake. But more than that, Snowflake opened at $ 245 or $ 269.50 depending on just your data source. Regardless, the company’s stock is currently worth $ 276.2 per share, some 130% above its IPO price. Which, as we mentioned earlier, was already very high, given the company’s most recent revenue results.
Adding to the Snowflake example, JFrog opened today at about $ 71.30, which is more than Up-already-raised distance IPO price of $ 44. He is wild! Despite earning revenue in its final quarter of just $ 36.4 million, JFrog is now worth $ 7 billion.
The message from today’s debates seems to be that the valuation is unchanged from the old rules – at the moment, that is – and thus companies that can post 100% growth or more have little in the way of caps at their upper limits.
Our takeaway: Now go public.
Combined with the good news, it can be seen that some values that we have understood are lower than others. The pop-end of the first day is not today’s market. For example, Lemonade is still around 50% above its IPO price, and OneMedical is 100% above itself. So, software evaluation is so wild that even software-adjacent companies are benefiting!
This is excellent news for a large number of unicorns. Good times are still there, surprisingly, while the economy is still very poor and electoral looms. All those old rules about the gradual quarters of profitability and not going public during more turbulent years, for now, are nonsense.
The normalcy will re-emerge at some point. Things will eventually calm down. But it is not so yet, so take out the S-1 and take advantage of the good times at the last minute.