GitLab CEO eyes public market after secondary valued it at $6 billion
Sid Sijbrandij, CEO of GitLab, at a corporate event in London
Sid Sijbrandij, CEO of GitLab, who had just completed an employee stock sale and valued his software start-up at $ 6 billion, said he still wanted to take the company public despite having a lot more options in Consider when were available in the past.
Sijbrandij on Thursday confirmed CNBC’s late-November coverage of the company’s valuation as part of its secondary offering, which allowed employees to sell up to 20% of their vested equity. He provided additional details on the size of the business and investors, as well as revenue growth and new customers.
GitLab’s cloud-based software is used by developers to share code and collaborate on projects. The company, which competes with Microsoft’s GitHub and Atlassian, has seen a boom in demand as more industries rely on software and digital tools to run their operations. GitLab specializes in helping programmers get product updates faster, lower operating costs, and accelerate development.
According to Sijbrandij, GitLab had annual recurring revenue of $ 150 million after seeing 74% growth in the most recent quarter. In 2020, the company signed three major airlines and a travel management provider despite the pandemic forced the travel industry to make dramatic cuts.
“It was the hardest hit industry last year and even they still bought,” said Sibrandij. “It’s been a tough year for many of our customers.”
In its “team manual” on its website, GitLab had openly announced its plan to go public by November 2020. After the pandemic upset the broader economy early last year, the company scrapped the timing for its debut while also stating that a public listing was still on the roadmap.
Sijbrandij said he did the secondary to “give our team members the opportunity to benefit from the value we have created together”. The $ 6 billion valuation is higher than the $ 2.7 billion valuation in a funding round in late 2019.
GitLab allowed current and former employees with vested equity to sell a total of 4.9 million shares, bringing the total offering to $ 195 million. Investors who bought the stock included Alta Park, HMI Capital, OMERS Growth Equity, TCV, and Verition. For the transaction, GitLab used the Nasdaq Private Market, which specializes in helping private companies provide secondary liquidity.
Sijbrandij said there was no schedule for a debut in the public market, although people familiar with the matter told CNBC in November that it was expected to come in 2021. The company has a number of ways to consider an IPO that either didn’t exist or was relatively untested prior to last year.
One option is a direct listing, launched by Spotify, Slack, Palantir, and Asana and tracked by Roblox, that allows employees to sell stocks to new investors immediately. Other companies like Unity, Airbnb, and DoorDash have opted for a hybrid auction that allows management to choose a price based on the bids. And there is the option of going public through a Special Purpose Acquisition Company (SPAC) or a reverse merger carried out by a so-called blank check company.
“There are a lot more options and we are following the market,” said Sijbrandij. SPACs are “an interesting alternative that is also on our radar,” he said.
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