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Late Stage Mature Pre IPO Unicorns - PreIPOSwap.com

Fintech Unicorn Bill.com Files For $100M IPO

From Crunchbase News, November 2019:

Payment software company Bill.com is aiming to raise $100 million in an initial public offering, according to a filing with the Securities and Exchange Commission.

Founded in 2006 by René Lacerte, Bill.com is known for its cloud-based business payments and software platform focused on the SMB market. Customers include accounting firms and a number of companies such as GustoThumbtack and Dialpad, according to its website.

The Palo Alto-based company has raised a total of $347.1 million over its lifetime, according to Crunchbase data. Most recently, in April 2019, Bill.com brought in $80 million in a round led by Franklin Templeton Investments that made it a unicorn. Other backers include Temasek Holdings and DCM Ventures. Strategic investors include MasterCardFidelitySilicon Valley Bank and Bank of America.

At the time of its April raise, the company said that more than three million members paid others or were getting paid with Bill.com. It also said at the time that it managed more than $60 billion in annual payments. In its SEC filing, the company said that it had over 81,000 customers using its platform “to manage their financial workflows and process their payments.”

Underwriters for its planned offering include Goldman Sachs, BofA Securities, Jeffries and William Blair, among others. Pricing terms have not yet been disclosed. It will trade on the New York Stock Exchange under the ticker symbol “BILL.”

The Money

Bill.com reported about $35.2 million in total revenue for the third quarter of 2019, representing nearly 57 percent year-over-year growth compared to $22.4 million in total revenue for the third quarter of 2018. For context, Bill.com’s total revenue grew 71 percent between the third quarter of 2017 and the third quarter of 2018. The company’s growth is slowing down, which isn’t unusual as companies mature.

It has increased its sales and marketing expenditure a bit though. Bill.com’s spending on sales and marketing climbed by 72.7 percent to $32.3 million in Q3 of 2019 compared to the same period in 2018. That’s up from a 46 percent jump between Q3 of 2017 and Q3 of 2018.

The company’s gross margins totaled about 74 percent for the third quarter of this year, compared to about 72 percent during the third quarter of 2018. That’s solid, as SaaS gross margins are typically between 70 and 90 percent.

In terms of losses, Bill.com reported about $5.7 million in net losses for Q3 of 2019, up 544 percent from the same period a year prior, when it had $884,000 in losses. The company reported just under $3 million in losses for Q3 of 2017, so it went from improving its losses between 2017 and 2018 to going further in the hole more recently.

But while its losses have increased, it’s important to note that relatively speaking, $5.7 million in quarterly losses for a SaaS company with gross margins over 70 percent isn’t a lot.

Regarding cash flow, Bill.com had -$4.5 million in free cash flow for the third quarter of 2019, up from -$3.5 million during the same period last year. It had $157.6 million in cash, cash equivalents and short-term investments as of the end of September.

Bill.com’s revenue is growing, its losses are minimal, and its gross margins are solid. More when it starts trading on the public markets.

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