JFrog, the US-based software release platform developer that counts computing technology producer Dell among its investors, went public yesterday in a $509m initial public offering on the Nasdaq Global Select Market.
The offering consisted of 8 million shares issued by JFrog and almost 3.7 million additional shares sold by its shareholders. They were priced at $44.00 each, comfortably above the IPO’s $33 to $37 range.
The company’s shares opened at $71.27 yesterday before closing at $64.79, giving it a market cap of more than $5.75bn, up from a $1.5bn valuation in October 2019.
JFrog has built a software platform that allows users to organise and schedule software updates in a continuous flow, a process it describes as liquid software. It increased revenue by more than 50% year on year to $69.3m in the first six months of 2020 while its net loss fell slightly to $430,000.
The offering comes after $227m in funding as of July 2019. Cloud and virtualisation software provider VMware (acquired by Dell in 2016) joined venture capital firm and existing backer Gemini Israel Ventures to supply $7m of series B funding for JFrog in 2014.
The company added $50m from Sapphire Ventures, Scale Venture Partners, Battery Ventures, Vintage Investment Partners, Qumra Capital and undisclosed investors through a 2016 series C round.
Insight Partners led JFrog’s $165m series D round in late 2018, investing with Dell subsidiary Dell Technologies Capital, Spark Capital, Geodesic Capital, Battery Ventures, Sapphire Ventures, Scale Venture Partners and Vintage Investment Partners at a valuation above $1bn.
JFrog’s largest shareholder is Gemini Israel Ventures, owner of a 15.7% stake diluted to 14.3% in the offering, while Dell’s stake was cut to 8.5%, Sapphire Ventures’ to 9% and Insight Partners’ to 8.9%.
Scale Venture Partners sold $47.7m of shares in the IPO and came out with an 8.6% stake while Qumra Capital divested $46m of shares to emerge with a 3.5% stake.
Morgan Stanley, JP Morgan and BofA Securities are lead book-running managers for the IPO while KeyBanc Capital Markets, Piper Sandler, Stifel, William Blair, Oppenheimer & Co and Needham & Company are co-managers.
The underwriters have a 30-day option to buy nearly 1.74 million extra shares, which would increase the size of the offering to more than $585m.
