New Batch of IPOs

Snowflake is damn interesting. But there are a lot of other companies coming down the IPO pipe, like Sumo Logic, JFrog, Asana, Palintir, Unity and others. And a few recent ones have gone public like Agora and BigCommerce.

I’m interested in any takes or good research folks have seen on any of those. I don’t feel the need to jump on bandwagons or have FOMO, and keep a tightly concentrated port, but do like to keep aware of new hypergrowth coming that I am not up on.

Let’s cuh-rowdsource some kuh-nowledge.


Richard Chu wrote up a good tweet storm on JFrog: https://twitter.com/richard_chu97/status/1304508914558472197…

Richard also covered Agora in heavy detail on his blog: https://richardchu97.substack.com/p/agora-democratizing-real…

Public Comps blog covered Asana S-1: https://blog.publiccomps.com/asana-s-1-teardown/

Jamin Ball covered Sumo: https://twitter.com/jaminball/status/1303374114992697345
Surprised to see the drop in revenues from COVID.

The Generalist is a new blog from a VC. Their S-1 Club covered Unity: https://thegeneralist.substack.com/p/the-s-1-club-unity-is-m…

(…they also covered Snowflake but I am biased towards my coverage + Public Comp’s S-1)

Has anyone dove into these companies?

-muji

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Meritech Capital has an S1 breakdown for

Sumo Logic
https://www.meritechcapital.com/blog/sumo-logic-ipo-s-1-brea…

Unity
https://www.meritechcapital.com/blog/unity-software-ipo-s-1-…

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Have a look into IPO Edge on Seeking Alpha. Might be exactly what you are looking for.

Hi Muji,

Thanks for bringing this to the board‘s attention. I looked at most of them (no deep dive). Here is my high-level overview.

Aside from Snow I like Frog as they seem to be the leader in their market, growing at 50%+ top line, profitable, GM 80%+, very high DBNER. But the growth has been decelerating (Covid?)

Sumo seems to be a smaller competitor to DDOG with growth falling to 30s.

Agora (API) is a Chinese company, growing at triple digits but are we ready to take geopolitical risks as around 80% of their revs are from China?

Asana grows in low 70s but their market is collaborative tools (work management/productivity). Somehow, I don‘t like the market, most of us have followed SMAR at some point. Perhaps, I‘m wrong here, but I‘m cautious with this one.

Unity - gaming infrastructure with growth in 30s/low 40s, most likely acceleration from 30s to 40s due to Covid.

All in all, for me clear buy is SNOW, but of course it will depend on the price. For the others - not sure. I like Frog, but decelerating revenue growth is a concern. Would need to investigate further.

Best,
V

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I’ve been looking at JFrog to understand just what they are. I think they have carved out a ‘place’ where many software developers will look at them, try out their products. A lot of their competition is big, but so big that codebase management, release package management, dev-ops environment management is not a needle-mover for them?

Plus, the security vulnerability management and the open source license management of all the open source software rolled into every project or product… it seems attractive, in that it pushes security and licensing issues toward the developers introducing the packages into the solutions instead of it rolling downhill towards some clueless operations person. (Somewhere on their page, JFrog says 200:5:1 is the ratio of devs:ops:security in a dev shop.)

I see DataDog trying out some of this, for sure, though. Maybe DataFrog is the future. I’m still looking at DDOG as the one to stay in, until their reporting numbers really show some weakness; I do not consider 68% growth weakness, either.

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I created some liquidity last week to take advantage of this weeks IPO’s. The ones I am looking to buy into are SNOW with a larger stake and open up smaller stake in Unity. I am passing on Sumo which seems to a DDOG competitor but am planning to stay invested in DDOG. I am going to keep a watch on JFROG but will most likely pass on Frog as I feel that SNOW and Unity have larger TAM’s to grow into and will have much larger MOATS for competitors to challenge them. I am planning to try and see if I can get into SNOW under 125 but have a feeling it may not be possible. I did buy into BIG Commerce when it dipped to 65. Did not sell when it moved to the 150’s, plan to hold and see how it evolves over the next two to three quarters.

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I’ve developed plugins for Unity developers and played with making a few games. While I love the company and what they are trying to do, I view them as more of an entry-level for new Indy developers. Don’t get me wrong. They have some awesome technology, but not disruptive.

When they started they were really a kick in the pants to Unreal Engine (made by Epic Games, private, makes Fortnite, GTA, so many), which is what all the big AAA games are built with but which also lacked an approachable interface. Unreal was too “hard-core”. So along comes Unity with (dot)NET scripting languages and lots of drag and drop, nice API, great component/modular interface, making it really easy to get going. It is super fun to play with. However, Unreal not only caught up but I believe is stronger than it has ever been. My own company played with Unity a bit for some non-game-related things before moving over to Unreal (sorry I can’t go in to details). In general, Unity games don’t have a great reputation.

Both Unity Engine and Unreal Engine are doing a lot in the areas of AI and real time rendering and visualization. E.g. at Unity: https://unity3d.com/machine-learning

It would be numbers that convince me to be an investor here. I’m not sure Unity is best-in-breed enough or disruptive enough. I AM interested in what these companies, and Nvidia, are doing for professional reasons, so I’ll be looking for sure. Regardless I hope they do well for the general game community’s sake.

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