Morning Report: 2017 Tech IPO Tintri’s Meltdown Draws Lawsuits, Sub-$100M Market Cap

Morning Report: Tintri recently slipped under the $100 million market cap mark. Its life as a public company has been nigh splatter.

Today shares of Tintri are off 4.9 percent, pushing its market cap under the $100 million mark. Indeed, according to Yahoo Finance, Tintri is worth just $92.4 million. Google Finance reports an even lower figure on public display.

Follow Crunchbase News on Twitter & Facebook

The decline under $100 million for Tintri is symbolic to an extent — it’s just a base-ten sourced benchmark that has no real merit — but also important on a relative basis for two reasons:

1. Tintri raised over a quarter billion dollars in capital before it went public from sources like NEA, Lightspeed, Menlo Ventures, Insight, and Akkadian. One performance metric that VCs like to look at is revenue pace compared to capital raised, or how much top line a firm can grind to off a certain investment base. Tintri has not only never managed to generate more revenue in a 12 month period than it has raised (at least since the time periods reported in its S-1 to date), it is also worth far less today than it raised, even discounting its IPO proceeds. That’s brutal.
2. Tintri is now worth a minute fraction of its peak private valuation of $785 million. The firm also took a steep haircut to go public at a value of just over $200 million. So, it has lost at least half its reduced value just this year.

And that decline hasn’t failed to attract attention. You can read the press releases of various lawsuits and investigations at your leisure.

Not every company will make it. Of those that do, not all should go public. We’ll keep an eye on Tintri to see if it manages turn around its public deflation.

In the meantime, what has made Tintri’s post-IPO life so hard? Please forgive the indulgent self-quote. From Crunchbase News’ initial coverage of Tintri’s financials:

Oof. Why is Tintri worth less than twice the capital it has raised to date? Likely because it only grew 45.45 percent in its last fiscal year — from $86.0 million to $125.1 million — while its losses grew from $100.98 million to $105.80 million. The firm, to its credit, has consistently shrunk its operating expenses as a percent of its revenue, from 196 percent in its 2015 fiscal year, to 174 percent in its 2016, and during fiscal 2017, just 146 percent. But losses of that magnitude tied not to a skyrocketing top line are hard to stomach.

Especially when you might expect the firm’s growth pace to slow on a percentage basis as its revenue base expands.

And there’s the little matter of its odd, and likely irksome, quarter ending April 30, 2016, in which it shrunk sequentially to its smallest size in a half year. Regardless, Tintri appears to be testing the lower-end of the enterprise IPO market. How investors treat it its debut will be a rich data point.

Now we know.

From The Crunchbase Daily: 

Waymo seeks $2.6B from Uber

• Alphabet’s Waymo division is seeking about $2.6 billion from Uber for the alleged theft of one of several trade secrets in a lawsuit over self-driving cars. The dispute may head to trial in October, although Waymo is seeking to delay it further.

Albertsons buys Plated

• Grocery chain Albertsons is buying healthy meal kit startup Plated for a reported price of between $175 million and $200 million, plus potential milestone payments. New York-based Plated previously raised about $56 million in venture funding.

Agrifood investment on the rise

• Early stage investment in agrifood tech startups totaled $4.4 billion in the first half of 2017, a 6 percent year-over-year increase, according to a new report from AgFunder. A majority of funding went to food delivery startups.

These corporate VCs produce exits

• Big tech companies put lots of money into corporate venture capital funds. But how many portfolio companies actually make it to exit? Crunchbase News looks at which corporate VCs see the most investments go on to IPO or be acquired… In other news, we report from Disrupt SF about the future of AI, rebranding Uber, and efforts to create inclusive workplaces.

Illustration: Li-Anne Dias