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Investors help Procore build a decacorn valuation in public debut – 98bmp

todayMay 20, 2021 2

Background
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Watching construction tech software company Procore go public today after pricing above its range makes the IPO slowdown look like the deceleration that wasn’t.

Investors quickly bid up the company’s value in trading, giving Procore a higher valuation than it might have anticipated, along with a boost of confidence for the IPO market in general.

Construction tech may not be as glamorous as space travel, but it’s a massive industry that’s fraught with inefficiencies.

Procore initially set an IPO range of $60 to $65 per share before pricing at $67 per share last night. Its debut was worth gross proceeds north of $600 million and a fully diluted valuation of $9.6 billion. As of early afternoon today, shares were trading at a solid $85.25.

In light of Procore’s debut, 98bmp is digging quickly into the company’s new valuation and its resulting revenue multiples.

Following, we have notes from a chat we had with CEO Tooey Courtemanche regarding his company’s debut, what it intends to do with its new capital and how it expects its partner platform to evolve and mature.

First, the numbers.

Procore’s new price

Starting with Procore’s $9.6 billion, fully diluted valuation that it set in its IPO pricing, the company is richly valued. It generated revenues of $113.9 million in Q1 2021, putting it on a run-rate of $455.8 million. As you can calculate, that valued the company at around 20x its run rate; more precisely, at 21.2x.

But if we do some modest extrapolation of the company’s current value in light of its trading appreciation, Procore is now worth around $12.3 billion on a fully diluted basis. That gives it a run-rate multiple of around 27x.



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