Similarweb, a provider of online market intelligence, took a major step over the weekend toward an initial public offering on Wall Street, releasing a prospectus providing a long-awaited look at its business.
The company has not yet determined the number of shares it will offer or the proposed share price range when it goes public for trading on the New York Stock Exchange.
Nor did the company offer a valuation for its planned IPO. Last December media reports said it was targeting $2 billion, and two months before that, Similarweb raised capital privately at a company valuation of $542 million after the money. Factoring in approximately 9.85 million options that have yet to be exercised, the fully diluted valuation at the time was therefore $623 million.
Similarweb has developed digital-intelligence technology that enables customers to identify trends, competition, and business opportunities by tracking and analyzing billions of digital interactions from websites and apps.
Or Offer, Similarweb’s CEO, said in October that the coronavirus had enhanced its business as more and more shopping went over to the internet. But the prospectus doesn’t show that: Revenue growth slowed to 32% in 2020 to $93.5 million, down from a 37% increase in 2019 to $70.6 million.
In the second quarter, growth was just 27% year on year, although in the final quarter of 2020 the pace picked up to 38%. However, spending on marketing and sales grew an even faster 44% in the final quarter of 2020 from the same time a year earlier.
The company’s growth has not yet begun producing positive cash flow. In 2019, it burned through $11.5 million and in 2020 another $4.5 million. Its net loss widened last year to $22 million from $17.7 million in 2019. Its non-GAAP operating loss, which discounts the impact of employee share-based compensation, was $14.9 million last year, compared with $14.1 million in 2019. On the other hand, its gross margin widened 54% in 2018 to 79% in the final quarter of 2020.
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The company was founded in 2007, but the only one of the founding team who remains is Offer. Over the years, it has raised $232 million from investors, but inside shareholders have also sold during that time, when two-thirds of the $120 million it raised went to buying out shareholders. Similarweb had $53 million in cash at the end of 2020 and debt of $30 million.
Similarweb employed 576 people at the end of last year, of whom 369 were based in Israel.
It ended 2020 with an 11% increase in the number of paying customers to 2,718, including nine of the top 10 technology companies and five of the top 10 retailers in the Fortune 500. However, nearly half its revenue came from 187 of those customers.