2020 IPO Report Card: Tech Company Performance

With the U.S. election approaching and the pace of initial public offerings (IPOs) decreasing, now is an opportune moment to assess the performance of the public debuts we’ve observed to date.

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Greetings, and welcome to a Monday analysis of the post-initial public offering performance of recently public, late-stage startups. We will also be assigning performance grades to these companies, as a matter of evaluation.

How did Snowflake’s performance measure up against Vroom, and how do both compare to JFrog and One Medical? Let’s examine the results.

Analyzing 2020’s Initial Public Offerings

The team at my previous role at Crunchbase News maintains a current list of 2020 IPOs, serving as a helpful resource to track these events. While we won’t be covering absolutely every offering – some smaller debuts can be excluded – we will focus on the most significant ones.

Let’s delve into a review of those key IPOs now:

Snowflake: The company set its price above the anticipated range and experienced a substantial increase in value. Starting at an IPO price of $120 per share, Snowflake currently trades at $250 per share. This valuation, relative to Snowflake’s revenue as a data-focused company, is remarkably high, making its price difficult to interpret. The company’s strong valuation led us to suggest that all technology companies should consider going public to capitalize on favorable market conditions. This year’s most notable IPO. A+.
Unity: Unity’s IPO sparked considerable interest among those following the gaming industry’s financial dynamics. For those focused on finance, it was particularly noteworthy. Investors were impressed, as were we. Initially, Unity established an IPO price range of $34 to $42 per share, which was then raised to $44 to $48 per share. The company ultimately went public at $52 per share and is now valued at $94.50 per share, representing a market capitalization of approximately $25 billion. This is a significant increase from its final private valuation of around $6 billion. A highly successful IPO. A.

Vroom: Vroom demonstrated that a company can successfully go public and be valued like a technology firm even while selling cars at cost. Vroom’s valuation was around $1.5 billion in its last private funding round and $2.5 billion at its IPO price of $22. Currently, it trades at $49.73 per share. In its most recent quarter, Vroom generated a gross margin of only $7.6 million on revenue of $253.1 million. That’s quite remarkable! A- for achieving a $5.9 billion valuation despite minimal gross margin profitability.
nCino: Built on the Salesforce platform, nCino priced its IPO above its initial range at $31 per share. The stock then experienced a significant surge, opening around 150% higher. Given that nCino was a SaaS business going public during a period of high demand for such companies, this performance was perhaps expected. Nevertheless, the company is now worth over $80 per share, representing a positive outcome. A-.

Lemonade: The Lemonade IPO remains a personal favorite of mine. This isn’t due to the need to expand my knowledge of the insurance sector, but rather because the company’s valuation appeared consistent with that of a more established organization. Initially, Lemonade’s IPO appeared somewhat underwhelming, with a targeted valuation range of $1.3 billion to $1.47 billion, lower than its previous private valuation of $2 billion (post-money). However, the IPO valuation was then revised to $1.47 billion to $1.58 billion. Even better! The stock then surged upon its debut, exceeding $60 per share – more than double its final IPO price of $29 per share. Today, it continues to trade above $65 per share. How can this not be considered a success for a company that, like Vroom, generates modest gross profits? A-.
JFrog: Investors enthusiastically supported JFrog, repeatedly mentioning “Developers! Developers! Developers!” as the company increased its IPO price range, ultimately pricing at $44 per share and subsequently rising in value. Currently valued at $75 per share, JFrog has a market capitalization of around $6.6 billion, a substantial improvement over its last private valuation of $1 billion. A-.
BigCommerce: In a year marked by Shopify’s significant growth, the BigCommerce debut was naturally anticipated. Following a strong quarter for Shopify, BigCommerce raised its IPO range to $21 to $23 per share, from $18 to $20 per share. It priced at $24 per share, and “the company opened at $68 per share today, currently trading for $82 per share,” as we reported on its first day of trading. Given the company’s relatively modest growth, we found its high valuation surprising. This indicated a successful IPO. A-.
Palantir: Another direct listing this year, Palantir is currently trading at $10 per share this morning. From a reference price of $7.25, this represents a strong performance. Compared to its pre-IPO trading price, it’s a surprisingly positive result. Palantir managed this debut despite significant concerns regarding its governance, largely due to its forecast of strong revenue growth. B+.
ZoomInfo: We observed the ZoomInfo debut this June, the listing of a company that had previously been traded privately. The data-focused company priced at $21 per share and is now worth nearly $43. That’s a substantial return. B+.
One Medical: Priced at $14 per share, with a valuation of around $1.7 billion, One Medical opened significantly higher and is currently worth just over $30. The company was valued at approximately $1.5 billion while private. Today, the concierge medical provider is valued at $3.84 billion. While it could have priced higher, this IPO was a success. B+.
Kingsoft Cloud: Do you recall this one? Priced at $17 per share, the China-based cloud company was valued at $3.7 billion upon its IPO. After initially experiencing an IPO pop, Kingsoft subsequently lost some of that momentum. However, today the firm is worth more than $31 per share, giving it a valuation of around $6.7 billion. Not a bad outcome. B+.
Jamf: Everyone’s preferred Apple-device management company had a successful IPO. After increasing its IPO range to $21 to $23, Jamf priced its debut at $26 per share. It was valued at around $3 billion at its IPO price, a 50% increase from its final private valuation. Today it’s worth about $35 per share, valuing the company at $4 billion. A solid result. B+.
Asana: One of this year’s direct listings, Asana’s financials revealed greater losses than anticipated. However, the firm had secured substantial pre-IPO debt and proceeded with its direct listing plans. From a reference price of $21, the company’s value increased. Today it’s worth $24 per share, give or take, or $3.85 billion. The company was last valued at around $1.5 billion in 2018. B.
Sumo Logic: Sumo Logic’s IPO was straightforward. It was valued at $1 billion before going public. It was valued at $2.2 billion at its IPO price of $22 per share. Today it is worth a little more than $24 per share. That’s perfectly acceptable! B-.
Casper: The unprofitable D2C mattress brand experienced a challenging path to the public markets, reducing its IPO price range from $17 to $19 per share to $12 to $13 per share. Finally priced at $12 per share, Casper is currently worth around $7. It did not raise as much capital as hoped and has faced difficulties since. D.