GitLab jumps 22% in its Nasdaq debut after code-sharing company priced IPO above expected range

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GitLab shares jumped 22% successful their archetypal time of trading connected Thursday aft the supplier of bundle for developer collaboration sold shares good supra its expected scope successful its IPO.

Trading connected the Nasdaq nether ticker awesome "GTLB," GitLab priced its banal astatine $77 precocious Wednesday, valuing the institution astatine astir $11 billion. GitLab had said it would apt merchantability shares astatine $66 to $69 each. The banal opened astatine $94.25, pushing GitLab's marketplace headdress to $13.5 billion

Since its founding astir a decennary ago, GitLab has been chasing down GitHub successful the root repository market, which besides includes Atlassian's Bitbucket. Microsoft acquired GitHub successful 2018 for $7.5 billion, and since that clip GitLab has grown rapidly arsenic the lone large autarkic subordinate successful the market.

Revenue successful the 2nd 4th jumped 69% from a twelvemonth earlier to $58.1 million. However, due to the fact that GitLab spends the equivalent of three-quarters of its gross connected income and marketing, mostly to physique its developer idiosyncratic base, the institution recorded a nett nonaccomplishment of $40.2 cardinal successful the latest quarter.

People observe the Gitlab IPO astatine the Nasdaq, October 14, 2021.

Source: Nasdaq

GitLab raised adjacent to $650 cardinal successful the offering, and investors purchased implicit $150 cardinal of further banal from an entity affiliated with GitLab CEO Sid Sijbrandij.

GitLab offers a escaped mentation of what the institution calls its DevOps platform, a word referencing the operation of developers and IT operations. The bundle allows users to enactment connected code, bundle it, merchandise it and show it. Customers tin tally GitLab successful immoderate nationalist cloud, their ain information halfway oregon arsenic a GitLab-hosted service.

The institution makes wealth from its premium products. For $19 a period per user, GitLab includes tools for enterprises and faster codification reviews, and for $99 a month, users get features similar information and compliance. Some 383 customers are spending astatine slightest $100,000 a year, GitLab said successful its prospectus.

"Our aboriginal occurrence depends, successful part, connected our quality to person users of our escaped merchandise offering into paying customers by selling further products, and by upselling further subscription services," GitLab said.

GitLab said its net gross retention rate, a cardinal metric for subscription bundle companies due to the fact that it shows lawsuit success, climbed to 152% successful the July period. That would enactment it among the apical publically traded bundle companies.

It's besides the main reason, on with GitLab's growth, that the institution is commanding specified a precocious gross multiple. At a $13.5 cardinal marketplace cap, GitLab trades for astir 58 times annualized revenue, beneath lone 4 of the 58 companies successful the Bessemer Cloud Index, and supra Atlassian.

GitLab is wide known arsenic a pioneer in remote work. While companies were forced to accommodate to distributed enactment during the pandemic, GitLab started that mode and didn't person to change overmuch of thing for its 1,350 employees operating successful much than 65 countries. In the header of its prospectus, Gitlab says "address not applicable."

GitLab, which was founded successful 2012 and incorporated 2 years later, was past valued at $6 cardinal successful a secondary financing, confirmed successful aboriginal 2021, that allowed existing shareholders to merchantability up to 20% of their vested equity. That was up from a $2.7 cardinal valuation successful a precocious 2019 financing round.

In its "team handbook" on its website, GitLab had openly stated its program to spell nationalist by November 2020. After the pandemic deed aboriginal past year, roiling the broader economy, the institution scrapped the timing for its debut portion indicating that a nationalist listing was inactive connected the roadmap.

GitLab co-founder Sijbrandij is the company's largest stakeholder, with 19% ownership earlier the offering, according to the prospectus. Khosla Ventures owns 14%, followed by ICONIQ astatine astir 12%, August Capital astatine 11% and GV (formerly Google Ventures) astatine conscionable nether 7%.

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