based SendGrid’s public debut sees stock jump 12 above its opening price
As SendGrid’s stock surged 12.7 percent above its initial opening price Wednesday, the Denver email firm’s public debut was hard to miss around Wall Street. An enormous SendGrid sign hung from the pillars of the New York Stock Exchange building. Digital signs were posted in Times Square and the city subway system.
“Any company that reaches an IPO has achieved a milestone that is pretty rare,” said Scott Heimes, SendGrid’s chief marketing officer. “We wanted to look at this day as a celebration, but it’s also a tremendous marketing opportunity for us.”
SendGrid, the Denver email services firm, turned its IPO into a marketing event with signs all over New York, including a massive one on the New York Stock Exchange building.
The company had priced its stock at $16 a share on the day before its IPO, which would bring in about $131 million. It opened at $18.55, or 16 percent higher, and hit a high of $19.21. The price hovered around $18 for most of the morning, closing at $18.03, up 12.7 percent on its first day.
CEO Sameer Dholakia and SendGrid’s three founders Isaac Saldana, Tim Jenkins and Jose Lopez rang the morning bell to open the NYSE. Many in the community expressed their excitement on Twitter, such as Erik Mitisek, the state’s chief innovation officer.
David Cohen, a co founder of Techstars, noted in a statement that SendGrid is the first graduate out of 1,055 Techstars companies to go public.
“Today, we congratulate the entire SendGrid team. It’s truly been an honor to work with them as their earliest investors in 2009, from inspiration to IPO,
” he said.
SendGrid isn’t yet profitable, but it has seen revenues rise since it was founded in 2009. In its first nine months this year, sales hit $80.2 million, which is higher than all of 2016. Net losses grew 36 percent to $4.7 million in the first nine months of this year, from the same period last year. It has also grown from three founders to 408 employees in its eight years.
Heimes said the company is going after an $11 billion email market, of which SendGrid has less than 3 percent. The company has expanded into marketing messages and is targeting international customers growth areas that may explain why the company’s stock price went beyond last week’s proposed targeted price range of $13.50 to $15.50.
“We were not surprised to see the positive reception that SendGrid received on its IPO today pricing above the range and trading 13 percent plus above its IPO price. It was priced at a discount to a group of fast growth enterprise software peers, despite a stronger record of profitability and growth,” said Kathleen Smith, principal at Renaissance Capital, which tracks IPOs and public companies.
According to Renaissance Capital’s IPO tracker, the index is up 32 percent so far this year.
“The IPO market is seeing a strong pickup in activity now as a result of reasonable valuations producing strong return for investors,” she said.
About 60 SendGrid employees and board members flew to New York for the event. At SendGrid offices in California, London and Denver, employees sipped mimosas while watching the event remotely.
Dholakia, busy doing TV interviews on IPO day, wasn’t available for his take on the morning’s events. But Heimes said that after the IPO excitement dies down, it’ll be back to work as normal.
“This is just one day out of many milestones we’ll experience in the future,” Heimes said. “We’re here today because of our people. It’s a dedicated team of Gridders that have helped us reach this point. Our four H’s honest, hungry, humble and happy they will continue and we’ll continue to talk about them and live those values everyday. We’re excited about the milestone, but it’s really just one step in a long journey.”