IPO mistakes, fintech results, and the Zenefits ‘mafia’ – TipsClear

IPO mistakes, fintech results, and the Zenefits ‘mafia’ – TipsClear

Welcome back TipsClear Exchange, A weekly startup and market newsletter for your weekend enjoyment. It is broadly based Week column that appears on Extra Crunch, But free. And it is made In college For you. You can sign up for the newspaper here.

That way, let’s talk money, top companies and the latest spicy IPO rumors.

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BigCommerce is not worried about its IPO pricing

One of the most interesting disconnects in the market today is how VC Twitter discusses successful IPOs and how CEOs of those companies view their own public market debates.

If you read Twitter on the day of the IPO, you will often see VC filling up, shouting that the IPO is a racket and they should be taken down now. But if you dial the CEO or CFO of the company who has gone public to welcome a really strong market, they will spend five minutes telling you why this is all wrong.

Case in point from this week: BigCommerce. Well-known VC Bill Gurley Was instigated BigCommerce shares opened faster after starting trading than the price of its IPO. He has a point, Texas-based e-commerce company priced at $ 24 per share (up) A raised range, It must be said), but Opened at $ 68 and worth $ 88 on Friday, as I write to you.

So, when I took BigBoss CEO Brent Belm to Zoom after its debut, I had some questions.

First, some background. BigCommerce filed back confidentially in 2019, planned to go public in April, and according to Bellam, the pandemic resulted in a wounding delay in its offering. Then in the wake of COVID-19, sales grew from existing customers, and new customers arrived. Therefore, the IPO was back.

BigCommerce, as a reminder Watching development Acceleration In recent quarters, its somewhat modest growth rate is more enticing than you would imagine otherwise.

Anyhow, if I miss the math, the company was over 10x its annual run-rate at the cost of its IPO, so it’s not Cheap Even at $ 24 per share. And in response to my question about pricing Belum said that he was satisfied with the final IPO price of his company.

He had a few reasons, including the IPO value that determines the basis point for future return calculations, that he measures success based on how well investors do in his stock over a ten-year horizon, and The more long-term investors you successfully lock during your roadshow, the first day your float becomes; The more investors who hold their shares after debut, the supply / demand curve may be more skewed, meaning that your stock opens higher than it otherwise might be due to having only scarce equity to purchase.

All of that seems incredibly reasonable. The patriarch is still livid.

Market notes

Exchange has spent a lot of time on the phone this week, allowing you to host notes for your consumption. And there was a holocaust of interesting figures. Therefore, everything we have heard and seen here should be digested:

  • Fintech mega-rounds heating upWith 28 in the second quarter of 2020. The overall fintech round sank, but it appears that the sky is still very high for financial technology startups.
  • Tech stocks have set new records this week, something that has become so common that new all-time highs for the Nasdaq won’t really create a ripple. Hell, it’s Nasdaq 11,000, where is our Ghosh party?
  • Dan Primack of Axios mentioned this week SPACs are currently raising more money than private equity, and new ones had more than $ 1 billion [SPAC] Filings over the last 24 hours “on Wednesday. I have apparently given up keeping an eye on the number of SPACs taking place.
  • But we did Two more digs out there at SPAC, If you wanted a taste of today’s market.
  • The exchange also spoke with Rackspace’s chief solutions officer, Matt Stoyka, before his shares started trading. COVID-19 momentum was emphasized after the chat, and continued to incur a lot of IT expenses. Rackspace intends to reduce its debt load with a portion of its IPO earnings. It cost $ 21, Lower end of its range, So it did not receive additional debut checks. And as the company’s shares are rising sharply today under their IPO value, there was no VC about the misunderstanding, specifically. (This stuff only rises when the results are bent in a particular direction.)
  • I also chatted with Fast CEO Joshua Bixby this week. The cloud services company gave back some of its recent gains after earnings, indicating how the market is probably acquiring some public tech stocks. After all To beat Q2 profit, Q2 revenue, and raised Its full-year guidance – and its shares fell? She is wild Maybe this income Generates Was it related to TikTok? Or perhaps after racing from a 52-week low of $ 10.43 to a 52-week high of over $ 11, the market realized that Fastley could only accelerate that much.

Whatever the case, increasingly during our chat CEO Joshua Bixby taught me something new: usage-based software companies are like SaaS firms, but more so.

In the old days, you would buy a piece of software, and then leave it forever. Now, it is common to purchase a one-year SaaS license. With usage-based pricing, you make a day-to-day shopping option, which seems to be the next step in the development of buying. I asked if not a model, you know, harder than mother-in-law? He said that maybe, but you wind up super alliance with your customers.

Various and varied

As always to wrap up, here is one last flurry of data, news and other Miskalania that is worth your time in the week:

  • TipsClear Chatted with intercom, Which has recently hired a CFO and is therefore ready to go public. But then it said that the first film was at least two years away, which was a strong one. The company wrapped up the fiscal year of January 31, 2020 with an ARR of $ 31 million. It is very big now. Going public!
  • Zenfits “mafia” Greatly increased, And A little this week. “Mafia” is a terrible word, by the way. We should start a new beginning.
  • Danny Crichton wrote about SaaS Revenue Securitization, Which was good.
  • Natasha Mascarenhas wrote About learning pods, Which is not super germane to the exchange, but is incredibly topical for our current lives, so I join all the same pieces.
  • I talked to The CEO In this week, noodling on the size of your company (ARR over $ 100 million), And their rivals Asan and Monday.com. The entire cohort has more than $ 100 million ARR, so I can turn them into a post titled “Go Public You Coward”, or something else, next week. But perhaps with a different title because I want to argue with 17 internal and external PR teams as to why I am right.
  • The exchange also negotiated with VC firms M13 (Larger on services, different home office locations, focusing on consumer spending over time) and Coefficient capital (D2C brand focused, super interesting thesis) this week. Our route is that there is more juice, and focus on the more consumer-centric side of VC, than you might have expected given the data you have recently given.

We’ve blown our 1,000 word target, so, short: stay tuned TipsClear For the super-cool funding round on Monday (it has the fastest growth I can remember hearing), make sure Listen to the latest equity period, And via parse Latest TipsClear List Update.

Hugs, fistbumps and good vibes,

Alex

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