New IPO Monday $MNDY SaaS Collaboration Software PRovider seeking $3.5B – $4B Valuation

Collaboration software provider Monday, $MNDY is seeking to IPO in June. The company is has not yet priced its offering and is likely to seek a $3.5B to $4B valuation, raising about $500M at IPO.

Israeli software provider monday.com files for an estimated $500 million US  IPO - Renaissance Capital
Monday $MDNY going public

$MNDY Monday was founded in 2012, in Tel Aviv, Israel by Eran Zinman and Roy Man. It is a Software as a Service (SaaS) solution for project management, task management and team collaboration.

The platform is cloud-based, so employees can update the status of projects in real time, yielding a set of dashboards that provide a bird’s-eye view of everything getting accomplished within an organization.

Israeli startup Monday.com is heading for a $4 billion Nasdaq IPO | Ctech

$MDNY Monday has about 800 employees and 128K customers. Its large customers (Spending over $50K annual) are 264 including Universal Music Group, Bayer AG, Mars, Inc, BBC Studios and Nielsen.

$MDNY competes with $WORK / $CRM (Slack/Salesforce), $SMAR (Smartsheet), $TEAM (Atlassian), $ASAN (Asana), Wirke (private), $MSFT (Microsoft Project, Teams) and many other tools.

Work Management Platform Monday.com To File For IPO On Nasdaq

$MNDY has raised over $235M since 2012 and was last valued in May 2020 at $2.7B.

monday.com: One platform, better teamwork.

$MDNY has seen revenues rapidly grow 106% in 2020 to $161M and has grown 86% in Q1 2021 to $59M. It had net losses of $152M in 2020. Sales and Marketing spend is over 100% of revenue. In Q1 2021, for instance, Monday.com generated $59 million in revenue with $63 million in associated sales and marketing costs.

What is monday.com? – Support

$MDNY investors include Sapphire Ventures, Hamilton Lane, HarbourVest Partners, ION Crossover Partners, Vintage Investment Partners, and Genesis Partners, an Israeli VC.

The Basics of a Board – Support

Valuation

If the IPO were to list Monday.com at $3.5B, then valuation looks reasonable at 21X LTM (2020) and 14X NTM (2021) revenues with 90% growth, since comparable valuations are

$MNDY$SMAR$ASAN
Market Cap$3.5B$6.5B$4.8B
2021 Growth (E)90%31%41%
2021 Rev$242M$502M$312M
EV / 2021 Rev14.413.115.2
Comparing $MNDY $SMAR and $ASAN

$MNDY Pros:

  1. Revenue growth of over 90% – 100% at $185M revenue run rate
  2. Gross Margins of 84%
  3. DBNER and Net revenue retention rate of 107% (all customers) – 121%(large customers)

$MDNY Cons

  1. Sales and Marketing expense is astonishing and looks unsustainable
  2. Very competitive space with $SMAR $ASAN and $TEAM executing well
  3. Reasonable valuation at 21X Last Twelve Months and 14X Next Twelve Months EV to Revenue for a company growing at 90%
Comparison of Monday, Smartsheet and Asana

Analysis

Strong growth combined with good margins make $MNDY interesting but I am going to wait for 6 months before I jump in.