GitLab software tools platform jumps 35% in trading

(Bloomberg) – Software development platform GitLab Inc. climbed 35% in its commercial debut, giving the company a market value of nearly $ 15 billion.

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Shares closed at $ 103.89 on Thursday, after the company, along with co-founder Sytse “Sid” Sijbrandij, sold 10.4 million shares for $ 77 on the IPO to raise 801 million of dollars. The shares had traded between $ 66 and $ 69, a price target that had been raised from an earlier range of $ 55 to $ 60.

Accounting for employee stock options and restricted stock units, the company has a fully diluted value of over $ 17 billion.

GitLab provides collaboration tools used by software developers and competes with Microsoft Corp’s GitHub. Goldman Sachs Group Inc., UBS Group AG, Siemens AG and ZipRecruiter Inc. are among its clients.

Investors in the remote-only company include funds and affiliates of August Capital, Alphabet Inc.’s GV, Iconiq Capital and Khosla Ventures, according to the documents. Sijbrandij, the company’s CEO, had planned to sell 1.98 million shares, worth $ 152 million at the IPO price.

Pandemic effect

The coronavirus pandemic has increased the dependence of software developers on GitLab, said Dave Munichiello, general partner of GV.

“It’s not anymore that they can get together in a small room and talk through the software they are building,” he said.

Although incorporated in Delaware in 2014, GitLab operates as a remote-only business and has no head office, according to its documents. Its 1,350 employees are located in more than 65 countries.

Income gain

The company recorded a net loss of $ 69 million on revenue of $ 108 million for the six months ending July 31, according to its documents. This compares to a loss of $ 44 million on $ 64 million in revenue in the same period the previous year.

The proceeds of the offering will be used for general corporate and working capital purposes, according to its documents. The main purpose of the listing is to provide a public market for its shares and to increase the visibility of the company, the company said in the prospectus.

The offering was led by Goldman Sachs, JPMorgan Chase & Co. and Bank of America Corp. The shares trade on the Nasdaq Global Market under the symbol GTLB.

(Updates with investor comments in the sixth paragraph)

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