Unpacking the nCino and GoHealth IPO filings

It’s IPO season in the United States, despite market volatility in recent months and historical blockers like an impending election. Given the public market’s return to form since March lows — paticularly the outperformance of the Nasdaq index and other tech shares — some venture-backed companies are trying to get out while the new offerings are welcome.

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Used-car marketplace Vroom is an example of this phenomenon, along with ZoomInfo’s recent IPO. Vroom priced at $22 and is now worth more than $50 per share, while ZoomInfo priced at $21 per share and is worth just less than $50 per share today.

So things are looking good for debuts. Heck, even Airbnb is making noise about still going public this year. So it’s no surprise that we’ve seen a few S-1 filings tossed around after what we’ve seen thus far from insurtech player Lemonade. Today let’s dig into the numbers from two such companies: banking software company nCino and GoHealth, an insurance portal that was bought by a private equity firm last year.

(Recall that we’ve covered venture-backed insurance marketplaces quite a lot this year.)

The companies, one based in North Carolina and one based in Illinois, are a break from our usual New York and Silicon Valley fare. Here, then, is a little more evidence that you can build a public company anywhere in America.


Founded in 2011, nCino is a Wilmington, North Carolina-based banking software provider that raised a little over $213 million while private, according to Crunchbase data. In its own words, nCino is a “bank operating system.” Given how much we’ve written lately about fintech, this is right up our alley.

The company filed to go public earlier this week, showing an ownership table that includes Insight Partners, Salesforce Ventures — Salesforce’s tech helps power nCino, its website says — and Wellington Management as external owners. Insight owns the largest piece, controlling around 46.6% of the company’s shares.

nCino is a SaaS business, so it breaks out its software subscription revenue in one bucket and its services revenue in another. In its fiscal year ending January 31, 2020, the company recorded $103.3 million in software revenue and $34.9 million in services top line. That combined revenue result of $138.2 million was up just over 50% from its $91.5 million result the year before.

But that growth came at a cost, namely rising losses. In its fiscal year ending January 31, 2020, nCino had net losses of $27.7 million, up from $22.3 million in the preceding fiscal year.

More recently, nCino detailed its quarter ending April 30, 2020. The company had total revenue of $44.7 million, including $34.8 million in software top line. Those two figures were up 50.0% and 65.6%, respectively; seeing nCino’s software revenues grow more quickly than its aggregate top line indicates that its revenue mix is improving, moving its center of gravity away from low-margin services toward high-margin software revenues. That’s a good thing.

Well, somewhat high-margin software revenues. In its April 30, 2020 quarter, nCino had software gross margins of 71%. That’s not amazing for a SaaS company, but, it is a 2% improvement from the year-ago quarter.

According to media reports, nCino has a private valuation of $1 billion or more. Given that this unicorn is on a revenue run rate of $178.8 million as of April 30, 2020, the company should be able to best that figure. (A fun game: What revenue multiple would you put on the company’s last quarter? Why?)

Given the current high value of SaaS revenues and general enthusiasm for growth-oriented shares, this IPO looks like a full-steam-ahead affair. More when it prices.


GoHealth is being snapped up by a private equity firm, making it a less-than-normally-attractive exit to cover, but as the company raised venture capital and operates a digital service it’s in our bag.

Chicago’s GoHealth is a digital service (online portal?) that lets users compare insurance quotes and buy coverage online. It’s a somewhat common model, with lots of startup competition. Before it was sold to Centerbridge Partners in 2019, the company had raised from Norwest Ventures and Nimble Capital, according to Crunchbase data.

As this is a private equity transaction, the company’s ownership structure is a mess, and its results are a slurry of historical results for the firm and pro forma figures. Instead of spending hours parsing the S-1 filing to figure out how it got Frankenstein’d in its time under PE stewardship, here’s how the company formerly known as GoHealth describes its listed financial results:

The following table presents the selected historical condensed consolidated financial data for GoHealth Holdings, LLC and its subsidiaries. GoHealth Holdings, LLC is the predecessor of the issuer, GoHealth, Inc., for financial reporting purposes. The selected consolidated statements of operations data and statements of cash flows data for the period from September 13, 2019 through December 31, 2019 (Successor), the period from January 1, 2019 through September 12, 2019 (Predecessor) and the year ended December 31, 2018 (Predecessor), and the selected consolidated balance sheet data as of December 31, 2019 and 2018 are derived from the audited consolidated financial statements of GoHealth Holdings, LLC included elsewhere in this prospectus. …

It goes on for some time.

From what we can tell, the company’s actual Q1 2020 was pretty good. Revenue of $141 million generated gross margin of just over 70%, a $5.8 million operating profit, and a net loss of just under $1 million after it paid for its debt costs.

The company got into lots o’ debt when it was bought. Here’s the S-1 again, bolding via TechCrunch:

On September 13, 2019, in connection with the Centerbridge Acquisition, Norvax, LLC, or the Borrower, entered into a first lien credit agreement, or the Credit Agreement, which provides for the following:

  • a $300.0 million aggregate principal amount senior secured term loan facility, or the Term Loan Facility; and
  • a $30.0 million aggregate principal amount senior secured revolving credit facility, or the Revolving Credit Facility.

On March 20, 2020, the Borrower entered into an amendment to the Credit Agreement, which provides $117.0 million of incremental term loans, or the Incremental Term Loan Facility.

Ouch, that’s a lot of debt capacity. And it got used: “As of March 31, 2020, we had $298.5 million and $117.0 million outstanding under the Term Loan Facility and the Incremental Term Loan Facility, respectively.”

So how fast is it growing? That’s tricky. If we compare its Predecessor results (the results of the company before IPO-related changes) it grew very little from 2018 to 2019. But when we compare its Successor results (the company as it will exist post-IPO) to Predecessor outcomes for 2019 we do see growth. It’s unclear.

Regardless, the company’s general financial bones — gross margins, profitability, etc. — will allow it to go public. We’ll know one hell of a lot more when this company prices. Until then, please add one point to the board for Chicago.

That’s it for now, but expect more as companies try to thread the needle and get out while the Nasdaq is over 10,000.