C3.ai’s initial IPO pricing guidance spotlights the public market’s tech appetite

On the heels of news that DoorDash is targeting an initial IPO valuation up to $ 27 billion, C3.ai also dropped a new S-1 filing detailing a first-draft guess of what the richly valued company might be worth after its debut.

C3.ai posted an initial IPO price range of $ 31 to $ 34 per share, with the company anticipating a sale of 15.5 million shares at that price. The enterprise-focused artificial intelligence company is also selling $ 100 million of stock at its IPO price to Spring Creek Capital, and another $ 50 million to Microsoft at the same terms. And there are 2.325 million shares reserved for its underwriters as well.

The total tally of shares that C3.ai will have outstanding after its IPO bloc is sold, Spring Creek and Microsoft buy in, and its underwriters take up their option, is 99,216,958. At the extremes of its initial IPO price range, the company would be worth between $ 3.08 billion and $ 3.37 billion using that share count.

Those numbers decline by around $ 70 and $ 80 million, respectively, if the underwriters do not purchase their option.

So is the IPO a win for the company at those prices? And is it a win for all C3.ai investors? Amazingly enough, it feels like the answers are yes and no. Let’s explore why.

Slowing growth, rising valuation

If we just look at C3.ai’s revenue history in chunks, you can argue a growth story for the company; that it grew from $ 73.8 million in the the two quarters of 2019 ending July 31, to $ 81.8 million in revenue during the same portion of 2020. That’s growth of just under 11% on a year-over-year basis. Not great, but positive.

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DoorDash aims to add $11 billion to its valuation during public offering

This morning, DoorDash filed a new S-1 document, this time updating the market about the price it expects to command during its public offering. The food-delivery giant gave a range of $ 75 to $ 85 per share, which would revalue the company sharply higher than its final private price, set during a June Series H that valued DoorDash at $ 16 billion.

The company intends to sell 33 million shares, raising between $ 2.475 billion and $ 2.805 billion in the process. Notably, there are no shares set aside for its underwriting banks to buy at its IPO price.


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After the public offering, DoorDash expects to have 317,656,521 shares outstanding across various classes, giving it a valuation of between $ 23.8 billion and $ 27 billion at the two extremes of its IPO range, not counting shares that have not yet vested or are set aside for future employee compensation. CNBC calculates that the company could be worth up to $ 30 billion on a fully-diluted basis.

What matters more than the raw dollar amounts, however, is what we can learn from them. Let’s get into the guts of the valuation range and find out if it’s bullish or if we should anticipate DoorDash to raise its range before it goes public.

Valuations, ranges

The new DoorDash S-1/A filing, it doesn’t appear to contain new financial information, so we can keep our prior notes on the company’s health and performance in mind. Recall that we were generally impressed by DoorDash’s growth and its improving profitability.

Other on-demand food services are doing well: HungryPanda just raised $ 70 million, and on the back of Uber Eats’ growth — and optimism that its ride-hailing business will return with the market-readiness of strong COVID-19 vaccines — shares of Uber are at all-time highs.

So you can taste the optimism that DoorDash is riding as it looks to list. Given our take, you would be forgiven for presuming that DoorDash is targeting an aggressive price.

Is it?

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Insurtech’s big year gets bigger as Metromile looks to go public

In the wake of insurtech unicorn Root’s IPO, it felt safe to say that the big transactions for the insurance technology startup space were done for the year.

After all, 2020 had been a big one for the broad category, with insurtech marketplaces raising lots, rental insurance startup Lemonade going public, Root itself debuting even more recently on the back of its automotive insurance business, a big round to help Hippo keep building its homeowners company, and more.


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But yesterday brought with it even more news: Metromile, a startup competing in the auto insurance market, is going public via a blank-check company (SPAC), and Hippo raised a huge, unpriced round.

So let’s talk about why Metromile might be plying the public markets, and why Hippo may have have decided to pick up more cash. Hint: The reasons are related.

A market hungry for growth

The Lemonade IPO was a key moment for neo-insurance startups, a key part of the broader insurtech space. When the rental insurance provider went public, it helped set the tone for public exit valuations for companies of its type: fast-growing insurance companies with slick consumer brands, improving economics, a tech twist and stiff losses.

For the Roots and Metromiles and Hippos, it was an important moment.

So, when Lemonade raised its IPO range, and then traded sharply higher after its debut, it boded well for its private comps. Not that rental insurance and auto insurance or homeowners insurance are the same thing. They very most decidedly are not, but Lemonade’s IPO demonstrated that private investors were correct bet generally on the collection of startups, because when they reached IPO-scale, they had something that public investors wanted.

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Cast.ai nabs $7.7M seed to remove barriers between public clouds

When you launch an application in the public cloud, you usually put everything on one provider, but what if you could choose the components based on cost and technology and have your database one place and your storage another?

That’s what Cast.ai says that it can provide, and today it announced a healthy $ 7.7 million seed round from TA Ventures, DNX, Florida Funders and other unnamed angels to keep building on that idea. The round closed in June.

Company CEO and co-founder Yuri Frayman says that they started the company with the idea that developers should be able to get the best of each of the public clouds without being locked in. They do this by creating Kubernetes clusters that are able to span multiple clouds.

“Cast does not require you to do anything except for launching your application. You don’t need to know  […] what cloud you are using [at any given time]. You don’t need to know anything except to identify the application, identify which [public] cloud providers you would like to use, the percentage of each [cloud provider’s] use and launch the application,” Frayman explained.

This means that you could use Amazon’s RDS database and Google’s ML engine, and the solution decides how to make that work based on your requirements and price. You set the policies when you are ready to launch and Cast will take care of distributing it for you in the location and providers that you desire, or that makes most sense for your application.

The company takes advantage of cloud native technologies, containerization and Kubernetes to break the proprietary barriers that exist between clouds, says company co-founder Laurent Gil. “We break these barriers of cloud providers so that an application does not need to sit in one place anymore. It can sit in several [providers] at the same time. And this is great for the Kubernetes application because they’re kind of designed with this [flexibility] in mind,” Gil said.

Developers use the policy engine to decide how much they want to control this process. They can simply set location and let Cast optimize the application across clouds automatically, or they can select at a granular level exactly the resources they want to use on which cloud. Regardless of how they do it, Cast will continually monitor the installation and optimize based on cost to give them the cheapest options available for their configuration.

The company currently has 25 employees with four new hires in the pipeline, and plans to double to 50 by the end of 2021. As they grow, the company is trying keep diversity and inclusion front and center in its hiring approach and they currently have women in charge of HR, marketing and sales at the company.

“We have very robust processes on the continuous education inside of our organization on diversity training. And a lot of us came from organizations where this was very visible and we took a lot of those processes [and lessons] and brought them here,” Frayman said.

Frayman has been involved with multiple startups including Cujo.ai, a consumer firewall startup that participated in TechCrunch Disrupt Battlefield in New York in 2016.

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Pay-per-mile auto insurer Metromile is heading to public markets via SPAC

Metromile, the pay-per-mile auto insurer that earlier this year laid off a third of its staff due to economic uncertainties caused by COVID-19, is taking the SPAC path to the public markets.

The company, which was founded in 2011 and is led by CEO Dan Preston, said it has reached a merger agreement with special purpose acquisition company INSU Acquisition Corp. II, with an equity valuation of $ 1.3 billion.

Metromile said it was able to raise $ 160 million in private investment in public equity, or PIPE, in an investment round led by Chamath Palihapitiya’s firm Social Capital. Existing investors Hudson Structured Capital Management and Mark Cuban, as well as new backers Miller Value and Clearbridge participated. Metromile will have about $ 294 million of cash at closing.

The company plans to use those proceeds to reduce existing debt and accelerate growth, specifically to hire employees to support its consumer insurance and enterprise businesses, and grow beyond its eight-state geographic footprint to a goal of 21 states by the end of next year and nationwide coverage by the end of 2022.

Metromile is credited for disrupting some of the inefficiencies of the auto insurance business model, notably how consumers are charged. Instead of a standard flat fee, Metromile charges customers based on their mileage, which it is able to measure via a device plugged into the vehicle. Some two-thirds of U.S. drivers are considered low-mileage, according to Metromile. By charging per mile, Metromile says its customers save 47% on average compared to their previous insurer.

The company developed a mobile app, which besides allowing users to file claims, offers other features such as alerting the driver of possible parking violations due to street sweeping activity. Now, with 3 billion miles of driver data, the company is able to make predictive models that help lower customer costs and improve their overall experience.

The company also built out an enterprise division in 2019 that offers a cloud-based software as a service to large legacy insurers. Metromile licenses components of its platform, including claims automation and fraud detection tools.

The COVID-19 pandemic created initial headwinds for Metromile, which had been one of the fastest growing startups in the Bay Area. Metromile ended up laying off about 100 people as it aimed to pare back its workforce. The company said at the time that its business was affected by pandemic-related stay-at-home orders, which caused its customers to drive less. The pandemic also prompted U.S. drivers to shop around for insurance and look for deals that supported their shift to lower mileage.

Investor Cuban said in the company’s SPAC announcement sees an upside for the business.

“During these times of financial hardship, unemployment, and work from home, Metromile provides an important insurance alternative,” Cuban said. “The option to pay for insurance by the mile is a game changer and why I’m incredibly excited about Metromile’s future!”

Social Capital’s Palihapitiya is equally bullish on the company, tweeting Tuesday “Buffett had Geico. I pick  @Metromile.”

Metromile has hired back staff and returned employees that it placed on furlough this spring. Today, the company has more than 230 employees and doesn’t expect any reductions in the workforce in the future. Instead, the company told TechCrunch it plans to hire additional staff on the expectation that both its consumer and enterprise businesses will grow “considerably” in the next few years.

The transaction is expected to close in the first quarter of 2021. The combined company will be named Metromile Inc., and is expected to remain listed on NASDAQ under the new ticker symbol “MLE.”

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AvePoint to go public via SPAC valued at $2B

AvePoint, a company that gives enterprises using Microsoft Office 365, SharePoint and Teams a control layer on top of these tools, announced today that it would be going public via a SPAC merger with Apex Technology Acquisition Corporation in a deal that values AvePoint at around $ 2 billion.

The acquisition brings together some powerful technology executives, with Apex run by former Oracle CFO Jeff Epstein and former Goldman Sachs head of technology investment banking Brad Koenig, who will now be working closely with AvePoint’s CEO Tianyi Jiang. Apex filed for a $ 305 million SPAC in September 2019.

Under the terms of the transaction, Apex’s balance of $ 352 million plus a $ 140 million additional private investment will be handed over to AvePoint. Once transaction fees and other considerations are paid for, AvePoint is expected to have $ 252 million on its balance sheet. Existing AvePoint shareholders will own approximately 72% of the combined entity, with the balance held by the Apex SPAC and the private investment owners.

Jiang sees this as a way to keep growing the company. “Going public now gives us the ability to meet this demand and scale up faster across product innovation, channel marketing, international markets and customer success initiatives,” he said in a statement.

AvePoint was founded in 2001 as a company to help ease the complexity of SharePoint installations, which at the time were all on-premise. Today, it has adapted to the shift to the cloud as a SaaS tool and primarily acts as a policy layer enabling companies to make sure employees are using these tools in a compliant way.

The company raised $ 200 million in January this year led by Sixth Street Partners (formerly TPG Sixth Street Partners), with additional participation from prior investor Goldman Sachs, meaning that Koenig was probably familiar with the company based on his previous role.

The company has raised a total of $ 294 million in capital before today’s announcement. It expects to generate almost $ 150 million in revenue by the end of this year, with ARR growing at over 30%. It’s worth noting that the company’s ARR and revenue has been growing steadily since Q12019. The company is projecting significant growth for the next two years with revenue estimates of $ 257 million and ARR of $ 220 million by the end of 2022.

Graph of revenue and projected revenue

Image Credits: AvePoint

The deal is expected to close in the first quarter of next year. Upon close the company will continue to be known as AvePoint and be publicly traded on Nasdaq under the new ticker symbol AVPT.

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Public health unit advises restaurant workers in Kingston to get tested for COVID – Yahoo News Canada

Public health unit advises restaurant workers in Kingston to get tested for COVID  Yahoo News Canada
“nigeria startups when:7d” – Google News

Public health unit advises restaurant workers in Kingston to get tested for COVID – Yahoo News Canada

Public health unit advises restaurant workers in Kingston to get tested for COVID  Yahoo News Canada
“nigeria startups when:7d” – Google News

Wish files to go public with 100M monthly actives, $1.75B in 2020 revenue thus far

This morning Wish, a well-known mobile ecommerce startup, filed to go public. It joins Affirm, Airbnb, and Roblox in filing this week as many well-known and valuable private companies look to debut before the year ends and the holidays start.

Wish’s S-1 (which is filed under its corporate name ContextLogic) is of particular interest given that COVID-19 and the global pandemic have changed consumer behavior around the world in 2020. As going to stores became more risky over time, many shoppers turned to buying more goods from the Internet, bolstering ecommerce players like Shopify, BigCommerce, as well as companies that facilitate online payments, like Square and PayPal.

How has the pandemic impacted Wish? It appears to have accelerated its growth.

Looking back in time, Wish saw its revenue growth slow in 2019, before expanding much more quickly in 2020. From 2017 to 2018, for example, when Wish saw revenues of $ 1.10 billion and $ 1.73 billion respectively, it grew 57%. But from 2018 to 2019, its revenue only grew to $ 1.90 billion, up a far-smaller 10%.

More recently, the situation has improved for the digital retailer, with Wish managing to grow more quickly in the first three months of 2020. In the first nine months of 2019, Wish racked up revenues of $ 1.33 billion. In the same period of 2020 the company’s top line grew to $ 1.75 billion, up 32% from the year-ago result.

That’s far better than the 10% growth pace that Wish showed in 2019. Wish’s growth acceleration helps explain why it is going public now: it has a growth story to tell investors.

But the company’s accelerated growth has come at a cost, namely rising losses. During the first three quarters of 2019, Wish posted net losses of just $ 5 million, before some preferred stock costs pushed its total deficit to $ 12 million. In the same period of 2020 Wish lost a far steeper $ 176 million.

Wish’s falling gross margins have not helped. In 2018, Wish had gross margins of 84%. That number fell to 77% in 2019, and then to just 65% in the first three quarters of 2020.

But the ecommerce player did have some more positive details to show, as this table details:

Improving free cash flow in 2020 compared to 2019? Check. Monthly active user growth rising nicely? Yes. Active buyers up compared to the year-ago period? Yep. Looking at the company’s adjusted profitability is not encouraging, but a 6% adjusted EBITDA margin won’t send investors packing for the hills if they buy Wish’s growth story.

COVID-19 was not simply a boost to Wish, its S-1 makes clear. The pandemic shut some supply hubs, slowed supply chains, and lengthened delivery times. But the company also said that it “benefited from greater mobile usage and less competition from physical retail as a result of shelter-in-place mandates” and “benefited from increased user spending due to U.S. government stimulus programs.” Noting that stimulus is fading, Wish warns investors in the document that it “cannot assure you that increased levels of mobile commerce will continue when COVID-19 has subsided or otherwise, or that the U.S. government will offer additional stimulus programs.”

Wish is wealthy, with around $ 1.1 billion in cash, cash equivalents, and marketable securities. It also has no long-term debts that could cause concern.

Finally, who is going to win in the deal? Most notably Peter Szulczewski, Wish’s founder and CEO. He controls 65.5% of the Company’s Class B shares and around 58% of its total voting power, pre-IPO. Major investors include DST Global, Formation8, Founder Fund, GGV Capital, and Republic Technologies.

Quite a lot of venture hopes and returns are riding on this IPO, then. More soon.

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