Twilio announces price range of IPO at $12-14 per share
Though Twilio filed its S-1 last week (indicating that the SEC has approved its plan to go public), announcing a price range is important because it shows that Twilio is continuing with its plan. This is in comparison to companies in the past that filed their initial S-1 (such as Nutanix and Box in 2014), then abandoned the idea due to market conditions.
Twilio's management have given an initial indication that investors believe their company is worth $1.07 billion, using the midpoint of $13 per share. As software companies are typically compared to other software companies based on a multiple of trailing-twelve-month (TTM) revenue, let's see where Twilio shakes out:
Twilio, at $1.07 billion, is valued at 5x its TTM Revenue, despite having grown revenue 84% over the past year (which outpaces all other SaaS companies). It would appear that, at $13 per share, Twilio is undervalued. We will see if the company revises its IPO price in the coming days.
In the meantime, here's a pretty cool graphic, courtesy of EquityZen:
In other news...
One might argue that avoiding the public markets is a sensible response when public-market investors are lukewarm. Private companies could hunker down, cut costs and conserve cash until the markets recover. But when exactly might that be?
An explosion of "unicorn" startups valued over $1 billion and more opportunities for smaller investors to buy and sell stakes has made the market for pre-IPO companies more like the public equity market. As a result, investors are pushing for startups to behave like their publicly listed counterparts.
Didi Chuxing, Uber’s main rival in China, has received a $600 million investment from state-owned China Life Insurance, one of Asia’s biggest insurance companies.