Morning Report: Tintri and Blue Apron are set to go public this week. Here’s what you need to know in advance.
Tech’s next two IPOs are set to go live this Thursday, implying that the firms could price tomorrow. IPOs are mercurial so that sequence could shift, but those timings reflect the latest from the Nasdaq’s public IPO calendar.
To ground ourselves ahead of the offerings, let’s talk about each.
Tintri: Red Ink And A Shrinking Valuation
The Tintri IPO is notable as it follows a few arcs we’ve kept an eye on across these pages. Namely, Tintri is yet another enterprise IPO, it’s a deeply unprofitable company, and that it appears ready to go public at a discount to its last private valuation.
(Bear in mind that down IPOs are not as common as some suspect, but they aren’t unheard of either.)
In its coverage of the Tintri filing, TechCrunch noted its valuation and funding:
But when we cut to a few weeks later, here’s Forbes:
[Tintri] hopes to raise up to $125 million by selling about 10 million shares to the public and to underwriters for between $10.50 and $12.50 a share. […] That would give it a valuation of between $339 million and $400 million.
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.
Blue Apron: A Unicorn Up IPO
On the Blue Apron front, we’ve done enough work together on the meal-kit for us to be summary. From our prior efforts, here are the most recent data points for the unicorn:
Regarding other key figures, Blue Apron is larger than Tintri by quite a bit. Its first quarter saw revenue of $244.8 million, a figure that grew 40 percent from its year-ago period. (Recall that Tintri was smaller in its last full-year than Blue Apron’s most recent quarter.)
Its losses are growing as well, it appears. From just a $54.89 million GAAP deficit in 2016, Blue Apron lost $52.15 million in its first quarter.
That, in addition to some debt Blue Apron picked up along its way to public, has enough baggage attached to it that its offering is not all green lights. And so, akin to Tinrtri in a small way, Blue Apron’s IPO will also show the public market’s interest in companies that are far from the cusp of real GAAP profits.
What Counts As Tech?
How can we even loosely compare Tintri, a thing that does cloud, and Blue Apron, the company who leaves large boxes in the lobby of your building like oversized adult legos? Because tech is broader than we might think, encompassing tech-enabled services, especially those that use digital shops to undercut brick-and-mortar shops that sport material storefronts.
If it’s your smartphone against the real world, it’s probably tech.
And so both companies work on the back-end of tech’s cloud infra, and concerns that merely depend on work of that sort can bear the mantle of tech.
Thursday’s an important day for the second quarter, closing out its final few days with twin IPOs. We’ll have more coverage right here.
From the Crunchbase Daily:
Google fined $2.7B
- The European Commission announced that it has fined Google €2.42 billion ($2.7 billion) for breaching EU antitrust rules by abusing its market dominance as a search engine to give an illegal advantage to its comparison shopping service. Google issued a statement saying it disagrees with the decision and is considering an appeal.
View closes $200M financing
- View, the maker of tint-changing “dynamic glass” for buildings, announced that it has closed a financing round of over $200 million that includes $70 million from BlackRock. Milpitas, Calif.-based View says its glass has now been installed across 20 million square feet of buildings.
Teespring sees valuation shrink
- Beleagured tee shirt sales platform Teespring isn’t folding up, but it has shrunk. The company, which is backed by high profile investors including Y Combinator, Andreessen Horowitz, and Khosla Ventures, underwent a stiff round of layoffs weeks ago and is now closing a new financing at a much lower valuation than previous rounds, Crunchbase News reports. For more stories, follow @Crunchbasenews on Twitter.
Apple said to buy eye tracking company SMI
- Apple has quietly acquired Germany’s SensoMotoric Instruments (SMI), a developer of eye tracking technology, according to a MacRumors reportciting documents and an anonymous source.
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