GitLab CEO watches public market after valuing $ 6 billion

GitLab CEO Sid Sijbrandij, who just sold an employee stock that valued his software start-up at $ 6 billion, said he is still looking to take the company public, although he is considering many more options than in the past.

Sijbrandij on Thursday confirmed CNBC’s late November reports on valuing the company in its secondary offering, which allowed employees to sell up to 20% of their acquired equity. He provided additional details on the deal size and investors, as well as revenue growth and new clients.

GitLab’s cloud-based software is used by developers to share code and collaborate on projects. The company, which competes with Microsoft’s GitHub and Atlassian, has seen a boom in demand as more industries rely on software and digital tools to run their operations. GitLab specializes in helping coders to speed up product updates, reduce operating costs, and accelerate development.

GitLab reached $ 150 million in annual recurring revenue, Sijbrandij said, after growing 74% in the last quarter. In 2020, the company signed three major airlines and a travel management provider even as the travel industry was forced to make dramatic cuts due to the pandemic.

“It was the industry hardest hit last year and even they still bought up,” Sibrandij said. “It has been a difficult year for many of our customers.”

In its “team manual” on its website, GitLab had openly declared its intention to go public by November 2020. After the pandemic struck early last year, disrupting the economy at large, the company canceled the schedule for its debut while indicating that a public enrollment was still on the roadmap.

Sijbrandij said he did high school to “give our team members the opportunity to benefit from the value we have created together”. The $ 6 billion valuation is up from $ 2.7 billion in a late 2019 funding round.

GitLab allowed current and former employees with acquired equity to sell a combined total of 4.9 million shares, bringing the total offering to $ 195 million. Investors buying the shares included Alta Park, HMI Capital, OMERS Growth Equity, TCV and Verition. For the transaction, GitLab used Nasdaq Private Market, which specializes in helping private companies to provide secondary liquidity.

Sijbrandij said there was no timeline for a public market launch, although people familiar with the matter told CNBC in November that it would likely happen in 2021. The company has a number of ways of doing it. ‘consider going public that did not exist or were relatively untested prior to last year.

One option is direct listing, the path that Spotify, Slack, Palantir, and Asana have taken and pursued by Roblox, which allows employees to immediately sell stocks to new investors. Other companies like Unity, Airbnb, and DoorDash, have chosen a hybrid auction that allows management to choose a price based on the auction. And there is the option of going public through a Special Purpose Acquisition Company (SPAC), or a reverse merger conducted by a so-called blank check entity.

“There are a lot more options and we are following the market,” Sijbrandij said. PSPC presents an “interesting alternative that is also on our radar,” he said.

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