As the IPO season restarts after the Burning Man Break, we have two new data points for you today. Both Datadog and Ping Identity, IPOs that we’ve covered before, announced initial price ranges this morning in fresh SEC filings.
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While the proposed price ranges do not provide final information regarding the companies’ worth, they do give us good guiding marks concerning their potential public value. So, let’s explore each quickly as we look ahead to their debuts, which should land next week.
Datadog intends to price its equity between $19 and $22 per share when it goes public later this month.
The self-described “monitoring and analytics platform” targeting the world’s developers will sell 24 million shares in its initial public offering. That figure could be augmented by a further 3.6 million shares offered to its underwriting parties. At $22 per share, Datadog could raise as much as $528 million, or $607.2 million inclusive of the underwriter’s option, in its public offering.
At the low-end of its range, Datadog is worth around $5.5 billion. At $22 per share, the New York-based tech company could tip the scales at a value of around $6.4 billion. The company’s investors (who put nine-figures of capital into the business) are likely content with the result. Index Ventures, RTP Ventures, OpenView, and ICONIQ all led rounds for Datadog during its life as a private company.
As a short reminder, Datadog put up $153.3 million in revenue during the first half of 2019, up from $85.4 in the year-ago period. Datadog appears on track to grow its revenue in 2019 by at least 50 percent from its 2018 result of $198.1 million. Datadog posted a profit in H1 2018 which melted into a $13.4 million net loss in H1 2019. Datadog remains less unprofitable than many 2019 IPOs of similar nature.
More when it prices next week.
Ping, a formerly venture-backed startup, is making its way to the public markets after a time spent in Vista Equity Partners‘ garage. The identity management company (think Okta) was snapped up by Vista back in 2016. Its IPO rumors have circulated at least since 2018.
And now the Denver-based company is going public. Targeting a $14 to $16 per-share IPO price range, Ping is selling 12.5 million shares, not including 1.875 million more reserved for underwriting banks. The combined tally at the top-end of its raise would put a $230 million gross raise into Ping’s pockets.
With just under 80 million shares outstanding after its IPO (including the underwriters’ option), Ping would be worth around $1.27 billion, a tidy sum for the company once powered by nearly $130 million in venture capital.
Ping’s growth rate is slower than Datadog’s, impacting its implied revenue multiple. The company’s revenue grew from $99.5 million in H1 2018 to $112.9 million in H1 2019. Over the same timeframe, Ping’s net loss tightened from $5.8 million to $3.1 million. Those losses are minute, making the firm’s slower growth rate likely more palatable to investors.
Still, Ping is targeting a revenue multiple that feels nearly starkly modest. Double its H1 2019 revenue and you get roughly $226 million. A $1.27 billion valuation is less than 6x that figure. In 2019 that’s a short multiple. As with Datadog, more when it prices.
Make sure you have your ears tuned to both Crunchbase News and our new, late-stage reporter Sophia Kunthara over the next few weeks as we track four fascinating IPOs.
Illustration: Li-Anne Dias.
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