USA IPO Encyclopedia | Valued at over $10 billion, cloud service provider HashiCorp, backed by GGV, will go public tonight

HashiCorp, a cloud infrastructure platform, plans to go public on Nasdaq on December 9th, Eastern Time, with the stock code HCP. The company will issue 15.3 million shares at $80 per share, raising $1.2 billion, surpassing the previously planned issuance range of $68 to $72 per share.

According to Bloomberg, based on the IPO price, the market cap of HashiCorp is approximately $14 billion. Taking into account employee stock options and restricted stock units, the company's fully diluted value may reach $16 billion.

In 2020, HashiCorp's valuation in the previous round of private markets was $5.1 billion. Its top investors are venture capital firms Mayfield and GGV Capital. Morgan Stanley, Goldman Sachs, J.P. Morgan, Bank of America Securities, and Citi are the joint underwriters for this transaction.

Business Overview

HashiCorp is a cloud infrastructure automation company. $HashiCorp (HCP.US)$ Founded in 2012 and headquartered in San Francisco, HashiCorp enables organizations to use consistent workflows to configure, secure, connect, and run any infrastructure for any application.

The management team is led by Chairman and CEO David McJannet, who has been with the company since July 2016 and previously served as Vice President of Marketing at GitHub.

HashiCorp's open-source toolkits include Vagrant, Packer, Terraform, Vault, Consul, and Nomad. These tools are downloaded tens of millions of times annually and are adopted by numerous top global enterprises. In addition, the enterprise edition products enhance the collaboration, operation, governance, and multi-datacenter capabilities of the open-source tools.

The main cloud infrastructure providers collaborating with HashiCorp include Alibaba Cloud, AWS, Google Cloud, Microsoft Azure, Oracle Cloud, and VMware.

HashiCorp believes that there are huge opportunities in the industry. Co-founder and CTO Armon Dadgar once said: Large enterprises took five years to adapt to the idea of public cloud, but most companies do not have the scale or experienced operators to run these services. Even if a company has the idea of migrating in this direction, it would focus more on other business rather than operating infrastructure.

Like Gitlab, a code hosting company that also went public in the second half of this year, HashiCorp also advocates a "telecommuting" culture. HashiCorp has been able to sustain momentum during the pandemic and has been less affected by the situation.

Financial Overview

Approximately 98% of HashiCorp's revenue comes from subscriptions. In the nine months ended October 31, 2020, the company's revenue increased by 49% YoY to $0.224 billion, with subscription revenue increasing by $73.9 million, a YoY growth of 51%. This growth was mainly driven by an increase in new customers. Professional services revenue increased by 6%, primarily due to the completion of certain professional service projects. During the same period, net loss increased by 28% to $62.44 million.

HashiCorp's revenue in the most recent quarter increased by 49% to $82.2 million, while the loss during the same period expanded from $9.3 million to nearly $22 million.

Click to view the prospectus.

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