The final IPO that TechCrunch is tracking in 2021 had a solid run-up to its first day’s trading. Samsara, an IoT platform company, priced its public offering last night at $23 per share, the top end of its range.
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In selling 35 million shares, the company had gross initial proceeds of $805 million from its IPO. That number could scale by 5.25 million shares, or $120.75 million in gross value, if the company’s underwriting banks purchase shares that they have the option to.
Ahead of Samsara’s public trading this morning, we’re taking a brief look at its final IPO valuation and final revenue multiples, then chatting about the recent downturn in SaaS prices and what could be on the horizon.
What’s Samsara worth at $23 per share?
There are two valuations that we care about regarding Samsara’s IPO. We want its simple, or non-diluted, valuation. And we want its fully diluted valuation. The latter number will include more total shares, adding equity that has been vested through options and the like, but not yet exercised.
Per our prior calculations, here’s where the numbers sit for the now-public entity:
- Samsara simple IPO valuation $23 per share: $11.6 billion
- Samsara fully diluted IPO valuation at $23 per share: $12.4 billion
Our math also indicated that Samsara is worth around 27x its most recent run rate at the latter valuation. That’s a multiple that many companies would have killed for in the past, but compared to recent norms it feels a bit, well, small?
In percentage terms, in its October quarter of this year compared to the last, Samsara’s revenues grew around 72%. That’s pretty darn good given that the company posted more than $100 million in revenue in its most recent quarter for only the second time in its history.
We have 72% growth, 70%-plus gross margins and nine-figure revenues. And a 27x multiplier. There’s more to be said about this, but, perhaps, welcome to a slightly more conservative pricing regime for software companies. This year we’ve seen public-market SaaS companies post negative returns. Which, frankly, we’re not talking about enough.
Regardless, the fact that SaaS companies have continued to grow this year while also seeing their valuations decline points to a multiples compression among software companies. In this light, the Samsara IPO valuation makes a bit more sense. It feels — while still expensive by historical standards — far saner than some prices we’ve seen in recent quarters.
One more note before we can sign off on this topic for the day: Doesn’t it feel like a somewhat muted day for a decacorn IPO? Samsara raised venture rounds through a Series F! And yet this IPO feels like it’s skating right under the radar.
There are two ways to think about what’s going on, I reckon:
- There have been so many tech IPOs this year that they are now simply making less noise than before, or,
- Everyone is busy trying to buy the latest NFT so that crypto founders do not decide that they will “ngmi.”
Or both, I suppose.
Samsara will start trading later this morning, and The Exchange is chatting with the company in a few hours. More to come.