For more crisp and insightful business and economic news, subscribe to The Daily Upside newsletter. It's completely free and we guarantee you'll learn something new every day.
The IPO market is prepping for the annual holiday slowdown, when stock trading takes the backseat to stocking stuffers and Christmas markets are rowdier than the trading floor.
But one big tech player announced Monday that it's moving forward with a public debut this week — Samsara, an emerging giant in the "internet of things" (IoT) space that encompasses any and all physical products that connect the real world to the internet and big data.
Sensing Big Returns
Samsara's tech is pretty straightforward: the company connects sensors that companies with vehicle fleets and industrial operations use to the cloud. This allows the data produced and compiled from those sensors — camera footage, motion detection, GPS location, and energy usage, for example — to be aggregated and used to improve onsite safety, slash insurance costs, and cut back on manual oversight.
Samsara plans to offer 35 million shares, priced at $20 to $23 each, as soon as Wednesday. The high end of that would more than double the company's valuation to $11.5 billion, just as it's shoring up its fiscal bonafides:
- While Samsara is not profitable, losses fell to $102.3 million in the nine months of 2021 leading to October, compared to $174 million in losses during the same period last year. Revenue also soared 74% to $302.6 million.
- The IoT market Samsara operates in was worth $761.4 billion in 2020 and is forecast to reach $1.39 trillion by 2026, according to Mordor Intelligence.
Big Paydays Come in Threes: CEO Sanjit Biswas, who will own 25% of the company after the IPO, and CTO John Bicket, who will own 24%, will become overnight billionaires (on paper, at least). Andreessen Horowitz, the tech focused Silicon Valley venture capital firm, will also be happy with its 18% stake.
Tis' Not the Season: While it's a quiet week with just a few IPOs, Warren Buffet-backed Brazilian lender Nubank, will also begin trading next week at a $41.5 billion valuation.