Software Maker Samsara Rises in Trading Debut After IPO Raises $805 Million
(Bloomberg) -- Samsara Inc., adding to a record year for software listings, rose 7.4% in its trading debut after raising $805 million in an initial public offering at the top of a marketed range.
Shares of the Samsara, which sold for $23 in the IPO, opened trading in New York Wednesday at $24.90. They closed at $24.70, giving the company a market value of more than $12 billion.
Samsara was aiming for its valuation in an IPO to exceed its $5.4 billion value in a funding round in 2020 that was led by Dragoneer Investment Group, Warburg Pincus and General Atlantic, Bloomberg News reported in February. Accounting for employee stock options, the company has a fully diluted value closer to $12.6 billion.
The listing adds to the all-time high of more than $37 billion raised by 80 software companies this year on U.S. exchanges, surpassing the previous record of $20 billion in 2020, according to data compiled by Bloomberg. Two of this year’s newly public companies, Playtika Holding Corp. and AppLovin Corp., raised $2 billion or more in their listings.
Samsara’s IPO may be one of the last big listings after a record-setting year in the U.S. for IPOs overall. More than $166 billion has been raised by 478 companies, not including special purpose acquisition companies, or SPACs, the data show.
As its stock symbol IOT implies, Samsara is focused on the so-called internet of things. Its hardware and cloud-based software are designed to help businesses run physical operations such as fleet management more efficiently. The company had a net loss of $102 million on revenue of $303 million for the nine months ended Oct. 30, compared with a loss and revenue of $174 million a year earlier, according to its filings with the U.S. Securities and Exchange Commission.
Co-founders Sanjit Biswas, who is chief executive officer, and John Bicket, the chief technology officer, control more than 24% of the shareholder voting power after the IPO, the filings show.
The coronavirus pandemic briefly slowed Samsara’s business but it rebounded quickly, especially as supply chain issues came to the fore, Biswas said in an interview.
“Within a few quarters demand came back very quickly,” Biswas said. “We’re seeing companies be even more interested in real-time data.”
With the proceeds from the IPO, Samsara may pursue acquisitions, he said.
The company’s largest investor, affiliates of Andreessen Horowitz, has 17.5% of the voting power, while General Catalyst controls 9.7%. Its board of directors include Marc Andreessen, the co-founder of the venture capital firm, who also sits on the board of Facebook, now known as Meta Platforms Inc.
Samsara’s IPO “demonstrates the potential of bringing computer innovation to industrial customers,” said Brendan Burke, an emerging technology research analyst at PitchBook.
Connected vehicles will continue to represent a high-growth area for Samsara, Burke said in an interview. One of the company’s biggest challenges may come from automakers embedding telematics capabilities in new vehicles, he said.
The offering is being led by Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Allen & Co. The company’s shares are trading on the New York Stock Exchange.
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