Written by Brenda Nakalema

Samsara IPO seeks valuation of $11.5 billion

Samsara set terms for its initial public offering on Monday, saying it plans to offer shares at $20- $23, according …

Samsara set terms for its initial public offering on Monday, saying it plans to offer shares at $20- $23, according to a Dec 6 prospectus. The company will trade under the ticker IOT on the New York Stock Exchange. The lead underwriters on the deal feature the usual big wigs; Morgan Stanley, Goldman Sachs, JP Morgan and Allen & Co.

With a share price set at $23, Samsara’s valuation could reach $11.5 billion. This valuation is way above the $5.4 billion valuation Reuters reported for the company during its last funding round in 2020. The deal pricing is scheduled for Tuesday, Dec 14 and begin trading the next day, as was reported by a trusted source.

In general, the IPO market has slowed down tremendously, owing to the Christmas season; only a handful of other IPOs other than the Samara IPO are expected during this period. The new issues expected this week include IPOs from Nubank, a Brazilian lender that has a set a valuation target of nearly $41.5 billion, HashiCorp, a cloud software provider looking to be valued at $13 billion.

Samsara was founded in 2015 by CEO Sanjit Biswas and John Bicket, the Chief technology officer. The company provides a connected operations cloud and sensors used by companies to manage their vehicle fleets and industrial operations. This isn’t the first successful company built by the duo; Sanjit and Bicket previously founded a start-up called Meraki, a cloud infrastructure company that was later sold to Cisco in 2015.

Samsara’s technology collects large amounts of data, including video footage, people and motion detection, GPS location and energy consumption. Companies pay for and utilize this information to improve their operations, increase efficiency and even provide better services to their customers. Some companies, for instance, use this information to improve safety, lower insurance costs and even reduce the need for manual oversight and judgment.

The company serves over 13,000 customers, which it defines as entities with annual recurring revenues of over $5,000. These include small businesses, state and local governments, and global enterprises. The company boasts of a few high profile clients, such as the city of Boston that uses its technology to manage its fleet of electric vehicles (EVs) and snowplows, Windy City Limousine, the City of Fort Lauderdale and Delta constructors.

Despite the healthy list of customers that it regularly serves, Samsara is not profitable, with losses totalling at $102.3 million for the past nine months ended on Oct 30. When compared with the losses amounting to $174 million for the same time period in 2020, the company has experienced steady growth- Revenue rose to $302.6 million for the period ended Oct 30, a 74% jump from the previous year’s figures.

After the IPO, Sanjit Biswas will own nearly 25%, while John Bicket, who also doubles as the executive vice president, will have 24.3%. The venture capital firm that exclusively invests in tech start-ups, Andreessen Horowitz, will hold nearly 18%.