two major private Tech companies announced an IPO price range this morning, with Toast targeting a market value of about $18 billion, and Freshworks at the top end of its range. looking for price Its equity ranges between $28 and $32 per share. Nerdshala has calculated that the company would be worth $8.9 billion at $32 per share, not employing a fully diluted share count.
Representing fully vested options and similar shares, the valuation of FreshWorks could reach $9.6 billion, Renaissance Capital Report.
Unlike Toast, FreshWorks is a more straightforward software company, with a revenue mix including four different products. This means we can do even more interesting things to understand its evaluation. So, this morning, let’s unpack how Freshworks is considering valuing itself at its current range in its IPO, look at some market comps, and come to the conclusion whether we should raise our valuations before unicorns float by. expect or not.
Lies, Cursed Lies and Revenue Multipliers
As a refresher, in the first half of 2021 (Q1 and Q2), Freshworks posted revenue of $168.9 million. That’s $337.9 million annually, thanks to numerical rounding.
Remember that the ordinary IPO valuation for the company and its IPO range generates lower share-price points – at a valuation of $9.6 billion Low evaluation and so more conservative That’s many times more than what we’re discussing here – Freshworks’ current revenue run rate will be 28.4x, set during H1 2021.