Traditional IPOs, Including B2B Services Firms, Dominate Market Activity
Traditional listings – initial public offerings (IPOs), that is – have dominated the markets in recent days. And the PYMNTS IPO/SPAC Tracker shows that work-related firms and platform announcements stood at 39 so far this year, surpassed only by banks, which are at 52 over the same timeframe.
Among the companies making public debuts this past week is Freshworks, which operates as a firm that provides customer management and other services for enterprise clients. The firm started trading on the NASDAQ exchange this week, raising more than $1 billion at a $10 billion valuation. The company’s pricing at $36 was above the stated range of $32 to $34.
As noted in this space, for the six-month period that ended June 30, Freshworks generated revenue of $168.9 million, up 53% over the previous year, with a net loss of $9.8 million, compared to a loss of $57.1 million in the same period in 2020.
Read also: Freshworks Valued at $10B in Nasdaq Trading Debut
Elsewhere, and in evidence of other B2B platforms gaining traction, Toast also went public this week, where shares leaped more than 50% in their initial trading day on the New York Stock Exchange. The company raised $870 million in its IPO, where initial sales of the shares clocked in at $40, well above the stated pricing range of $34 to $36, which was in turn higher than an earlier pricing range of $30 to $33.
In its filing, the company noted that at the end of June, it had roughly 48,000 restaurant locations and a total of 29,000 customers. In the past 12 months, Toast processed more than $38 billion in gross payments. The company has a 6% market share of the 860,000 U.S. restaurants, Toast said.
Read more: POS ResTech Firm Toast Eyes IPO up to $717M
Software consulting firm Thoughtworks, which works with enterprises to digitize their operations, went public a bit earlier in the month, raising more than $344 million at a valuation of about $8.8 billion.
The company noted in its S-1 filing with the Securities and Exchange Commission (SEC) that “as companies struggle to keep pace with this accelerating rate of technological innovation, they need to rely on service providers to drive digital transformation, creating a massive market opportunity,” and cited studies estimating that global spending on that digital transformation could be worth more than $1 trillion by 2025. Revenues for the company through the six months that ended June 30 were up nearly 25% year on year, reaching $498 million.
In other IPO action, ID management firm ForgeRock went public and raised $275 million in its own debut mid-month. “More than 1,300 organizations around the world leverage our platform to manage collectively over three billion identities,” the company disclosed in its S-1 filing, which has helped it realize 30% annualized recurring revenue growth rates through the six months that ended in June, at $155 million.
And in announced plans, AvidXchange Holdings, which provides a B2B billing and payments software platform to mid-market businesses, filed Sept. 17 with the SEC to raise up to $100 million in an IPO.
At the end of FY 2020, as PYMNTS reported, the company said there were more than 7,000 buyers on the platform, with more than 700,000 suppliers paid, cumulatively, from 2015 to 2020. About 53 million transactions were processed in the fiscal year 2020.
“The B2B payments market is rapidly evolving and represents a significant opportunity for digital transformation,” the company said in its filing, where paper checks account for roughly 42% of the $25 trillion spent on B2B payments annually. The filing quoted PYMNTS’ own data that found 46% of AP professionals would like to implement digital AP automation solutions.
Also see: AvidXchange Eyes $20B Need for Supplier Invoice Finance
And, in a nod to the fact that there was indeed some SPAC-related activity, MoneyLion went public this week through a combination with Fusion. The digital finance platform said it is launching a cryptocurrency feature for both buying and selling.
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