Procore Jumps in Debut After Yearlong Pandemic Wait Pays Off
(Bloomberg) -- Procore Technologies Inc., a cloud-based construction software company, rose 31% in its trading debut after exceeding its initial public offering goals to raise $634.5 million.
The shares closed at $88 Thursday in New York trading, giving the company a market value of about $11.3 billion. Diluted to include employee stock options and restricted stock units, that value increases to more than $13 billion.
The company sold 9.47 million shares for $67 each Wednesday after marketing them for $60 to $65.
The listing was Procore’s second run at going public. Based in Carpinteria, California, it first filed in February 2020 for an IPO but postponed the transaction during the coronavirus pandemic. After the delay, it raised more than $150 million in a funding round from investors including Dan Sundheim’s D1 Capital Partners at a $5 billion valuation, Bloomberg News reported.
“There was a one year pause in this whole process but then in the grand scheme of things it has been a very finite period of time,” Procore Chief Executive Officer Tooey Courtemanche said in an interview.
“For every one of those customers that had delayed projects, those projects are going to get built,” he said. “The school that didn’t get built is now going to get built. The hospital that needed the extension is getting built. So it’s all coming back we’re very optimistic about where this is all going.”
Procore gets 12% of its revenue from outside the U.S., Courtemanche said. With an international expansion begun in 2018, the company has operations in Singapore and the United Arab Emirates, as well as offices in Sydney, London and Mexico City, he said.
The company continued to attract new users during the pandemic, growing its customer base by 19% in 2020. With more than 40% of construction firms reporting higher costs and slower project completion due to labor shortages, the digitization of the industry has accelerated during the past year, the company said in filings with the U.S. Securities and Exchange Commission.
For the first quarter, Procore had a net loss of $14 million on revenue of $114 million, compared with a $19 million loss on revenue of $92 million for the same period a year ago, according to the filings.
Board member Elisa Steele said the construction industry still has room to become more technology friendly, creating a large market opportunity for Procore.
“The market in construction has really not been part of the digital evolution,” she said.
Procore’s top backers are Iconiq Strategic Partners, which will own almost 37% of the shares after the IPO, and Bessemer Venture Partners, which will have a 13% stake. Tiger Global Management is also an investor.
The offering was led by Goldman Sachs Group Inc., JPMorgan Chase & Co., Barclays Plc and Jefferies Financial Group Inc. Procore‘s shares are trading on the New York Stock Exchange under the symbol PCOR.
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