GitLab CEO Sid Sijbrandij, fresh off an employee share sale that valued his software start-up at $6 billion, said he’s still looking to take the company public, though he’s eyeing many more options than were available in the past.
Sijbrandij on Thursday confirmed CNBC’s reporting from late November about the company’s valuation in its secondary offering, which allowed employees to sell up to 20% of their vested equity. He provided additional details on the size of the deal and the 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 have come to rely on software and digital tools to run their operations. GitLab specializes in helping coders make product updates faster, lowering operating costs and speeding development.
GitLab reached $150 million in annual recurring revenue, Sijbrandij said, after experiencing growth of 74% in the most recent quarter. During 2020, the company signed three major airlines and a travel management provider even as the travel industry was forced to make dramatic cuts because of the pandemic.
“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 handbook” on its website, GitLab had openly stated its plan to go public by November of 2020. After the pandemic hit early last year, roiling the broader economy, the company scrapped the timing for its debut while indicating that a public listing was still on the roadmap.
Employee Stock Option
Sijbrandij said that he did the secondary to “give our team members the opportunity to benefit from the value we created together.” The $6 billion valuation is up from $2.7 billion valuation in a late 2019 financing round.
GitLab allowed current and former employees with vested equity to sell a combined total of 4.9 million shares, bringing the total offering to $195 million. Investors buying the stock included Alta Park, HMI Capital, OMERS Growth Equity, TCV and Verition. For the transaction, GitLab used Nasdaq Private Market, which specializes in helping private companies provide secondary liquidity.
Sijbrandij said there’s no timetable for a public market debut, though people familiar with the matter told CNBC in November that it was likely to come in 2021. The company has a number of ways to consider going public that either didn’t exist or were relatively untested prior to last year.
One option is a direct listing, the path taken by Spotify, Slack, Palantir and Asana and being pursued by Roblox, which allows employees to sell shares to new investors immediately. Other companies like Unity, Airbnb and DoorDash, chose a hybrid auction that let management choose a price based on bidding. And there’s the opportunity to go public through a special purpose acquisition company (SPAC), or a reverse merger conducted by a so-called blank-check entity.
“There are a lot more options and we’re following the market,” Sijbrandij said. SPACs present an “interesting alternative that’s also on our radar,” he said.