GitLab Inc shares jumped about 35 per cent above their offer price in their Nasdaq debut on Thursday, giving the software development platform a market capitalisation of US$14.9 billion, showing strong investor appetite for fast-growing software companies.
The company's stock opened at US$94.25 and closed at US$103.89, compared with the initial public offering price of US$77 per share. The company had said it would likely sell shares at US$66 to US$69 each.
"We grow when we get to talk to people in the C-suite, to the CIO, the CTO... Part of the reason for going public is to create that awareness," said Sid Sijbrandij, co-founder and chief excutive officer at GitLab.
GitLab offers both free and paid versions of developer operations platform, a single application that brings together software development and IT operations. Developers in companies across industries can use it to write, package, release and monitor code.
The company makes money from its subscription products. For US$19 a month per user, GitLab provides companies with tools for faster code reviews, and customer support. For US$99 a month, users get full access with features including security testing and compliance.
GitLab, whose customers include Nvidia Corp, Siemens AG and Goldman Sachs Group Inc, sold 8.42 million shares in its IPO. A selling stockholder affiliated with Sijbrandij sold 1.98 million shares. The IPO raised nearly US$801 million in total.
Backed by Khosla Ventures and Google Ventures, GitLab competes with GitHub, which Microsoft purchased for US$7.5 billion in 2018.
In its fiscal year ended January 2021, GitLab posted revenue of US$152.2 million, up from 81.2 million a year earlier. The company's gross profit rose around 86 per cent to US$133.7 million, and operating loss widened nearly 67 per cent to US$213.9 million.
GitLab said its net dollar retention rate jumped to 152 per cent by the end of July this year, a key metric for subscription software companies.
Started as an open-source project in 2011 by co-founder Dmitriy Zaporozhets in his house in Ukraine, GitLab is notable for being a fully remote work force since inception, currently with approximately 1,350 employees in more than 65 countries.
The company was last valued at US$6 billion after a secondary share sale in January this year, according to startup data platform PitchBook.
GitLab's debut comes amid a flurry of major tech listings as software and technology companies look to capitalize on the sky-high investor demand for new, high-growth tech stocks. UiPath Inc and Coupang Inc made strong US market debuts earlier this year.
But the IPO market has slowed in recent weeks as concerns over inflation and choppy trading forced some companies to delay their listing plans.
Goldman Sachs & Co, JP Morgan and BofA Securities were the lead underwriters for GitLab's offering.