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IPO mistakes, fintech results and the Zenefits mafia – TechCrunch



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7;s talk about money, upstart, and the latest sharp IPO rumors.

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BigCommerce isn’t worried about IPO prices

One of the most interesting breaks in the market today is how VC Twitter talks about successful IPOs and how the CEOs of these companies view their own debuts in the public market.

Often times, if you read Twitter on an IPO day, you will see VCs trudging around yelling that IPOs are a bully and that they need to be phased out now. However, if you call the CEO or CFO of the company that actually went public to a strong market reception, you will spend five minutes explaining to you why all of this gossip is completely wrong.

Case in point this week: BigCommerce. Known VC Bill Gurley was angry BigCommerce shares opened significantly higher than the IPO price after it started trading. He’s Right: The Texas-based e-commerce company costs $ 24 per share (see above) an increased rangeshould be said), but opens at $ 68 and is worth around $ 88 on Friday as I write to you.

When I got BigCommerce CEO Brent Bellm on Zoom after his debut, I had a few questions.

First, some background information. BigCommerce submitted in confidence as early as 2019, planned to go public in April and, according to Bellm, delayed its offer due to the pandemic. In the course of COVID-19, sales of existing customers increased and new customers arrived. The IPO was thus reopened.

BigCommerce is a reminder See growth acceleration Over the past few quarters, the somewhat modest growth rate has been more tempting than you’d otherwise imagine.

Anyway, if I remember the math, the company was worth more than ten times its annual run rate at IPO price, so it wasn’t cheap even at $ 24 a share. And in response to my question about pricing, Bellm said he was happy with his company’s final IPO price.

He had a couple of reasons, including that the IPO price is the starting point for future returns calculations, that he measures success by how well investors do in his stock over a ten-year period, and that you do well with the longer-term investors, close during your roadshow, the smaller your float gets on the first day. The more investors hold their stocks after debut, the more the supply / demand curve can skew, meaning your stock opens higher than usual as equity is scarce to buy.

It all seems incredibly reasonable. Even so, VCs are angry.

Market notes

The exchange has been spending a lot of time on the phone this week, resulting in a lot of notes for your consumption. And there was a deluge of interesting data. Here’s a round-up of what we’ve heard and seen, what you should know:

  • Fintech mega-rounds are heating upA total of 28 in the second quarter of 2020. The total number of fintech rounds has gone down, but it seems like heaven for financial tech startups is still pretty brisk.
  • Tech stocks broke new records this week, which has become so common that the Nasdaq’s new all-time highs didn’t really cause a stir. Damn it’s Nasdaq 11,000, where’s our damn party?
  • Axios’ Dan Primack noted this week that SPACs may be raising more money than private equity right now, and that “over $ 1 billion is new [SPAC] Submissions in the last 24 hours ”on Wednesday. To be honest, I’ve given up on keeping an eye on the number of SPACs going on.
  • But we did Browse through two of the SPACs that are more out therein case you want a taste of today’s market.
  • The exchange also spoke to Rackspace’s chief solutions officer Matt Stoyka before the shares began trading. The chat highlighted the post-COVID-19 dynamics and the ongoing cloud transition of many IT spending. Rackspace intends to use a portion of its IPO proceeds to reduce its debt burden. It is priced at $ 21. the lower end of its range, so it didn’t get an additional debut check. And with the company’s stock trading well below its IPO price today, there hasn’t been any VC chatter about mispricing, especially. (This stuff only shows up when the results bend in a certain direction.)
  • I also had a chat with Joshua Bixby, the CEO of Fastly, this week. The cloud services company returned some of its recent gains after winning, showing the market may be overvaluing some public tech stocks. At least quickly beat on Q2 profit, Q2 sales and raised his guidance for the full year – and his stocks fell? This is wild. Maybe the income there generated Was worried about TikTok? Or perhaps, after racing from a 52-week low of $ 10.63 to a 52-week high of over $ 117, the market realized that Fastly could only accelerate so much.

Anyway, Joshua Bixby, CEO of Fastly, taught me something new during our chat: Usage-based software companies are like SaaS companies, but more.

In the past, you bought software and owned it forever. It is now common to buy annual SaaS licenses. With usage-based pricing, you make the purchase decision every day. This is the next step in the evolution of the purchase. I asked if the model isn’t harder than SaaS. He said maybe, but that you are super focused on your customers.

Miscellaneous and miscellaneous

Finally, as always, here’s a final rundown of dates, messages, and other things worth your time starting the week:

  • TechCrunch chatted with intercomwho recently hired a CFO and is preparing to go public. But then they said the debut was at least two years away, which was a bummer. The company ended its fiscal year ended January 31, 2020 with an ARR of $ 150 million. It’s much bigger now. Get to the public!
  • The Zenefits “Mafia” raised a lot, and a little this week. “Mafia” is a terrible term, by the way. We should come up with a new one.
  • Danny Crichton written about SaaS sales certificationwhich was cool.
  • Natasha Mascarenhas wrote about learning from podsthat are not particularly important to The Exchange but found me incredibly timely for our current life, so I’m including the piece anyway.
  • I spoke to … the managing director from Wrike this week, noodles on the size of his business (over $ 100 million ARR) and its competitors Asana and Monday.com. The entire cohort has an ARR of over $ 100 million each, so I could turn them into a post next week called “Go public, you cowards” or something. But probably with a different title since I don’t want to argue with 17 internal and external PR teams about why I’m right.
  • The exchange also talked to VC firms M13 (heavily on services, various domestic office locations, focus on consumer spending over time) and Coefficient capital (D2C brand-oriented, super interesting thesis) this week. Our finding is that there is more juice out there and we’re focusing on the more consumer-centric side of VC than you’d probably expect given the latest data.

We exceeded our goal of 1,000 words, so in short: stay tuned TechCrunch Make sure you have a super cool round of funding on Monday (she has the fastest growth I can remember) Listen to the latest Equity episodeand analyze through the Latest TechCrunch List Updates.

Hugs, punches and a good mood,

Alex




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