Two major private tech companies publicised IPO price ranges this morning, and Toast targeting a market value of close to $18 billion at the top end of its area and Freshworks looking to price its equity amongst $28 and $32 regarding share. TechCrunch calculates that the company would be valuable around $8. 9 million at $32 per express, not employing a fully diluted share count.
Inclusive of shares represented by- fully vested options etc, Freshworks’ valuation could arrive $9. 6 billion, Renaissance Grand reports .
Unlike Toast, with a rémunération mix including four different products, Freshworks is a significantly more straightforward software company. That implies we can do much more such as work to understand its valuation. So , this morning, let’s unpack how Freshworks is believing valuing itself in its BÖRSENGANG at its present range, visit some market comps, to come to a conclusion associated with whether or not we expect their unicorn to raise its valuation before it floats.
Lies, damned lays and revenue multiples
As a refresher, at the first half of 2021 (Q1 and Q2), Freshworks listed revenues of $168. dokuz million. That annualizes on $337. 9 million, courtesy of numerical rounding.
At a valuation of $9. 6 billion — recall capabilities that simple IPO valuations to make the company and lower share-price points from its IPO broad generate substantially more affordable valuations and as such is more traditionalistic multiples than what we’ll be discussing below — Freshworks would be actually worth 28. 4x its recently available revenue run rate, determined during H1 2021.