Morning Report: The Adaptive Insights IPO is off (not that we’re bitter whatsoever). Instead, the firm took a bigger check to join up with Workday. All together now: boo.
Consider my working calendar changed. Instead of going through with its own public offering, Adaptive Insights has opted for subsumption by Workday. Workday, worth more than $26.5 billion as of this morning, will pay around $1.55 billion for the smaller company.
(For more on what Adaptive Insights does, and how its business works, head here.)
The $1.55 billion price tag is a win for the startup’s investors as the firm was targeting a valuation of roughly half its sale price in its IPO, as Axios’ Dan Primack notes:
The price is $1.55 billion, which is more than double the $705 million fully-diluted value that Adaptive Insights would have fetched in the middle of its IPO range.
Why did Adaptive Insights sell? Because it got a swell price, really. As we noted in our prior coverage, the company’s last fiscal year brought in total revenue of $106.5 million—nearly $94 million came from recurring sources. If the firm was shooting for a ~$700 million midpoint, it was hoping to debut worth, say, seven times trailing revenue. That number is in the realm of sanity for the current software startup market. At $1.55 billion, the company is exiting for fifteen times its last year’s revenue, a very good result.
And, for a company that only raised $176.3 million, according to Crunchbase, Adaptive Insights is nearly ten-bagging its external capital.
And thus ends our week’s IPO. Once more: boo.
iStockPhoto / Oksana Raievska