Long before the pandemic, software company GitLab operated entirely remotely, creating its development tools without any physical office. It was also unusual in another way: Co-founder and CEO Sid Sijbrandij had a date set for his possible public offering: November 18, 2020.
The Covid-19 had other plans. But already configured in many ways to push more work online – both in its corporate structure and with its products, which help businesses build, maintain, and secure their websites and apps – GitLab hasn’t had to wait too long. The company went public Thursday on the Nasdaq under the ticker “GTLB”. Valued at $ 77, GitLab shares closed their first day of trading at $ 103.89, up 35%, giving GitLab a market cap of nearly $ 15 billion.
In an interview, Sijbrandij (pronounced âsee brandyâ) said going public would help GitLab remain a long-time manager with sufficient resources for the open source project on which its enterprise software is built. âIt was bound to happen someday,â says Sijbrandij. âWe knew we were ready, the markets were ready, so why not take the plunge today? “
With revenue of $ 58 million in the previous quarter, up 69% year on year, for losses of $ 40 million, GitLab fits the mold of a traditional B2B software provider with strong growing and unprofitable – the cloud players who in recent years have proven popular, and able to command high multiples, along with Wall Street. Although its losses have reduced recently, GitLab still generates around $ 1.50 in new business for every $ 1 previously spent by customers on its tools, putting it in elite company in the category.
But unlike recent companies such as Amplitude, Warby Parker, and Coinbase which have gone for a direct listing instead of an IPO, GitLab has gone the traditional route. Proponents of direct quotes typically cite the first day ‘pops’ as evidence that the value created by the rise in stock prices is going to banks and insider investors who buy into the IPO, not the IPO. business itself, leaving millions of potential fuel for the listed company on the table. Startups that raise private funding before a direct listing, they note, could bring in comparable amounts of money for smaller parts of their business.
Like Snowflake CEO Frank Slootman and others before him, Sijbrandij was not swayed by such arguments. The CEO of GitLab said he preferred to select investors through a traditional IPO roadshow. âIt’s great that there are so many options available for businesses,â he says. âThere are a lot more possibilities available to entrepreneurs. So I encourage everyone to do their due diligence and talk to a few companies that go through the different processes. I think there are good reasons for everyone … we are really happy with the course [we chose], and happy with the investors we were able to attract.
Perhaps an even more important factor for GitLab: As a DevOps company, the company and its leader wanted as much visibility as possible. GitLab has spent aggressively on sales and marketing over the past few quarters relative to its revenue, and Sijbrandij has repeatedly noted that being public would help increase GitLab’s awareness and profile with customers, partners and potential investors. The company was the very first on the Nasdaq to broadcast live all day of its IPO, with around 18,000 people stopping in the course of the broadcast, the statement said.
Former employee of a submarine company and web project manager for the Dutch Ministry of Justice, Sijbrandij started GitLab in 2012 as a company based on an open source project created by Dmitriy Zaporozhets and Valery Sizov. Zaporozhets joined a year later as a co-founder and CTO (Sizov followed in 2014). GitLab, the company would sell software tool subscriptions to help manage projects based on this technology, charging for what has become a suite of 10 separate tools for different stages of an application’s lifecycle.
This means that GitLab competes with a variety of offerings from other companies, including, unsurprisingly from the name, Microsoft’s subsidiary GitHub, but also infrastructure players and security specialists. âA few years ago when we introduced security, we saw a lot of revenue coming from it and we asked these people, ‘Why did you buy this? â, Says Sijbrandij. The tool was not yet as good as the others, GitLab answered us. But customers would find vulnerabilities faster in GitLab; Buying everything from one vendor was easy enough that they trusted GitLab to catch up over time. âIt has been a great accelerator of our growth,â said Sijbrandij.
Along the way, Sijbrandij has also emerged as one of the leading evangelists of remote working, advocating a non-hybrid and radically transparent office culture he says is fairer and more productive. This purist point of view remains an advantage in hiring, he says Forbes now; it also helps explain the livestream, partly the marketing opportunity and partly to include GitLab employees and advocates around the world. “It’s still behind closed doors,” Sijbrandij said of the IPO festivities and the listing process. Originally from the Netherlands, Sijbrandij added that his parents were two of the viewers. “It was great to share it with the world.”
And while GitLab hasn’t quite reached its initial IPO proclamation date, Sijbrandij says that October also matters. When he started raising outside capital in 2015, he asked co-founder and CTO Dmitriy Zaporozhets, one of the creators of the open source project that GitLab was built on, how long he had committed to building the ‘business. Ten years after the start of the project, Zaporozhets told Sijbrandij.
Going public in November 2020 would have had its own symbolism and would have given some leeway, Sijbrandij admits. But with the first code engagement in the GitLab project on October 8, 2011, the company’s IPO date fell within a week of Zaporozhets’ deadline. âIt’s great to be able to celebrate this important milestone together today,â says Sijbrandij.