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IPO

GitLab aims for $10B valuation amid growing sales and costs

GitLab has raised its IPO pricing range, as the company banks on investors’ focus on growing revenue rather than large operating losses.

Developer collaboration platform GitLab has raised its IPO price range to $66 to $69 per share, up from $55 to $60. The company would be valued at nearly $10 billion at the top end of the range, well above the $7.5 billion Microsoft paid in 2018 for its main competitor, GitHub.

GitLab, which began as an open-source project in Ukraine in 2011, was incorporated as a company in 2014. After the startup went through Y Combinator‘s accelerator in 2015, Khosla Ventures—now GitLab’s largest shareholder, aside from its CEO—led the company’s $1.5 million seed round and $4 million Series A later that year. Since then, Gitlab has raised a handful of funding rounds, including a $268 million Series E in 2019 that valued the company at $2.8 billion, according to PitchBook data. Gitlab reportedly reached a $6 billion valuation in January.

The IPO filing shows rapid revenue growth. For fiscal 2021, GitLab reported sales of $152 million, a year-over-year increase of 87%. For the six months ended July 31, revenue grew 69% over the same period last year. And the company shows an annualized revenue rate shooting up to $233 million, based on Q2 2021 sales figures.

But GitLab is nowhere near a breakeven point, as its costs still far exceed its revenue. Though while the company’s operating expenses have been growing on an absolute basis, they have decreased as a percentage of revenue from 184% in the first half of 2020 to 139% in the first half of 2021.

 

Featured image by Chalirmpoj Pimpisarn/Getty Images

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    About Marina Temkin
    Marina Temkin covered the venture capital ecosystem from 2021 to 2024, based in San Francisco. Previously with Venture Capital Journal, Marina wrote about the VC industry, and she was a reporter with Mergermarket in New York and San Francisco. She also has been a financial analyst and is a CFA charterholder. Marina received an economics degree from the University of California, Davis, and she attended the CUNY Graduate School of Journalism.
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