Cloud computing company DigitalOcean filed for a $100 million IPO on Thursday, revealing growing revenue and steady losses.
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DigitalOcean’s platform offers tools for companies, particularly developers, startups, and small and medium-sized businesses. The company, which is based in New York, last raised a $50 million Series C led by Access Industries in May 2020. Investors in DigitalOcean include Fortress Investment Group and Andreessen Horowitz.
Tech IPOs (and special purpose acquisition companies) are hot right now, and the public market rush of 2021 is just beginning. Among the largest beneficiaries of DigitalOcean’s IPO will be Andreessen Horowitz, IA Ventures, and AI Droplet Holdings LLC.
So, let’s take a look at DigitalOcean’s numbers.
DigitalOcean reported nearly $318.4 million in revenue in 2020, up almost 25 percent from the $254.8 million in revenue generated by the company in 2019. Its losses grew relatively little between 2019 and 2020, going from around $40.4 million in 2019 to about $43.6 million in 2020.
The company has more than 570,000 customers across 185 countries, according to its S-1 document. RouteTrust, Cloudways and Centra are listed among its customers. DigitalOcean has a special focus on developers, startups and SMBs, which the company lists as a risk factor in the filing.
“Our core customer base consists of individual developers, early stage start-ups and small-to-medium size businesses, many of which plan for high growth. We expect that our path to growth will, in part, rely on scaling our platform to meet the needs of such customers as they increase usage of our platform,” the company wrote. “Accordingly, if such customers fail to grow as expected, then our path to growth may be adversely affected. In addition, our inability to offer both suitable services to support their businesses at scale and suitable and appropriately priced services for the initial state of their business, and could adversely affect our business, financial condition and results of operations.”
DigitalOcean’s IPO filing comes around the same time as Coinbase’s public S-1 registration statement and after a handful of other S-1 filings this year, including Oscar Health. While tech IPOs have been well-received by the public markets upon their trading debut, they’re currently being outpaced by IPOs of special purpose acquisition companies, or SPACs. Tech and tech-adjacent companies including Rover and Lucid Motors have also announced their intent to go public by merging with SPACs.
Illustration: Dom Guzman
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