Oct 14 (Reuters) - GitLab Inc shares jumped about
35% above their offer price in their Nasdaq debut on Thursday,
giving the software development platform a market capitalization
of $14.9 billion, showing strong investor appetite for
fast-growing software companies.
The company's stock opened at $94.25 and closed at $103.89,
compared with the initial public offering price of $77 per
share. The company had said it would likely sell shares at $66
to $69 each.
"We grow when we get to talk to people in the C-suite, to
the CIO, the CTO... Part of the reason for going public is to
create that awareness," said Sid Sijbrandij, co-founder and
chief excutive officer at GitLab.
GitLab offers both free and paid versions of developer
operations platform, a single application that brings together
software development and IT operations. Developers in companies
across industries can use it to write, package, release and
The company makes money from its subscription products. For
$19 a month per user, GitLab provides companies with tools for
faster code reviews, and customer support. For $99 a month,
users get full access with features including security testing
GitLab, whose customers include Nvidia Corp,
Siemens AG and Goldman Sachs Group Inc, sold
8.42 million shares in its IPO. A selling stockholder affiliated
with Sijbrandij sold 1.98 million shares. The IPO raised nearly
$801 million in total.
Backed by Khosla Ventures and Google Ventures, GitLab
competes with GitHub, which Microsoft purchased for
$7.5 billion in 2018.
In its fiscal year ended January 2021, GitLab posted revenue
of $152.2 million, up from 81.2 million a year earlier. The
company's gross profit rose around 86% to $133.7 million, and
operating loss widened nearly 67% to $213.9 million.
GitLab said its net dollar retention rate jumped to 152% by
the end of July this year, a key metric for subscription
Started as an open-source project in 2011 by co-founder
Dmitriy Zaporozhets in his house in Ukraine, GitLab is notable
for being a fully remote work force since inception, currently
with approximately 1,350 employees in more than 65 countries.
The company was last valued at $6 billion after a secondary
share sale in January this year, according to startup data
GitLab's debut comes amid a flurry of major tech listings as
software and technology companies look to capitalize on the
sky-high investor demand for new, high-growth tech stocks.
UiPath Inc and Coupang Inc made strong U.S.
market debuts earlier this year.
But the IPO market has slowed in recent weeks as concerns
over inflation and choppy trading forced some companies to delay
their listing plans.
Goldman Sachs & Co, J.P. Morgan and BofA Securities were the
lead underwriters for GitLab's offering.
(Reporting by Echo Wang and Krystal Hu in New York; Additional
reporting by Niket Nishant and Praveen Paramasivam in Bengaluru;
Editing by Shailesh Kuber, Aditya Soni and Daniel Wallis)