All posts by Mukund Mohan

My discipline will beat your intellect

New IPO $GTLB Gitlab Software Source Code Respository and DevOps SaaS platform

Software version control is a very important element of the lifecycle of development. Developers share the latest version of code they are working on in a repository that helps all team members be on the same page.

Gitlab $GTLB filed to go public today and the S1 provides their overview, strategy and growth plans with financial background, which I will breakdown. This is an important software category so I am keen to seek a position in the fast growing company.

GitLab Pricing | GitLab

$GTLB helps multiple developers work on the same code without stepping on each others code or hindering the other’s progress. Each developer works on their own “branch” or copy of the main code and after making changes will “commit” changes via a “merge request”.

$GTLB Gitlab is an online hosted platform built on open source Git to help organizations manage their code repositories and the entire software development lifecycle.

Gitlab: Your complete DevOps Platform | E-SPIN Group

$GTLB now has a complete platform for DevOps (Developer + Operations) which helps companies deliver software faster, securely and with fewer bugs. This helps them have an archive of previous changes and versions.

$GTLB The complete lifecycle of Devops spans project planning, or Plan, to source code management, or Create, to continuous integration, or Verify, to static and dynamic application security testing, or Secure.

$GTLB allows packaging artifacts, or Package to continuous delivery and deployment, or Release, to configuring infrastructure for optimal deployment, or Configure, to monitoring it for incidents, or Monitor.

Finally $GTLB helps to protect the production deployment, or Protect, and managing the whole cycle with value stream analytics, or Manage.

$GTLB was founded in 2014, a few years after the founders started their open source project, by Sytse “Sid” Sijbrandij (CEO), Dmitriy Zaporozhets and Valery Sizov.

How This Startup Made $10.5 Million in Revenue With Every Single Employee  Working From Home |

In 2015 $GTLB raised series A funding from Khosla ventures and has raised over $400M to date. Gitlab was last valued at $6B in a private market transaction in Jan 2021.

$GTLB Revenues in CY Q2 rose by 69% to $58.1M ($230M annualized), with losses at $40M. The company has over 1345 “fully remote” employees in 65 countries. They have a net retention rate of 152% – which is among the best in the industry.

$GTLB gross margins are a very healthy 88% (industry leading) and 52% operating margins, which are terrific as well. They have over 3600 customers and over 2600 contributors to their open source projects. 383 customers spend over $100K annually.

From a few friends who use $GTLB in the valley they are a very sticky application. Once a customer decides to implement Gitlab they rarely leave.

$GTLB competes with $TEAM Atlassian (BitBucket) and $MSFT (GitHub) and many other source code repository solutions. The market opportunity for the DevOps Platform is approximately $40 billion according to Gartner, which makes this a large TAM.

My analysis: I like $GTLB a lot and will be interested in a position, but I suspect given market conditions the company will be public at $10B to $15B valuation, which implies a 43X to 65X NTM revenue multiple for a company growing at 69%. If I am able to get in under $9B valuation, which I doubt, then I could consider sizing up to 2% of my portfolio.

New IPO CUE HEalth $HLTH – Direct to Consumer Health diagnostics provider

$HLTH is a fascinating company and I am going to take a very different approach to this IPO overview. Cue Health manufactures a rapid healthcare diagnostics product. It is similar to home glucose meters or pregnancy kits.

Cue $HLTH intends to sell its devices direct to consumer. It is currently sold to healthcare professionals. It currently provides a rapid (25 minutes) Covid 19 test, which is FDA approved.

$HLTH – In 2009 after the SARS virus, Ayub Khattak (UCLA 2010) and Clint Sever, co founders of Cue decided to build a device that detects the virus at “home” instead of going to a diagnostics lab to test for the virus.

Cue Is A Connected Lab-In-A-Box For On-Demand Health Testing At Home |  TechCrunch
$HLTH founders

After multiple iterations and funding from incubators, accelerators and other institutions, they launched a version of their diagnostic device in 2015. Sold for $150 (pre order) or $300, it detected vitamin D deficiencies, testosterone levels and influenza. Each test can be administered with a cartridge (sold for $2 – $10 each). The device itself is handheld.

Cue, a home test system to be available next year, consists of a device that can be held in the hand and one-use cartridges for five tests: inflammation, flu, fertility, testosterone and vitamin D.

Users provide a nasal swap, or drop of blood or saliva, depending on the test. Results arrive in minutes, displayed on an iPhone or Android smartphone using the Bluetooth.

If this reminds you of Theranos (yeah, I had flashbacks too), the similarities end quickly. Since March 2020 the company got $481M in funding from the Department of Health and Human services (HHS) to ramp up production of its Covid19 diagnostic test.

$HLTH claims efficacy close to other (95%+) detection. The test is administered to patients by using a proprietary nasal swab (“Cue Sample Wand”); the swab is inserted into a small medical device (“Cue Cartridge Reader”) that analyzes it with a high degree of accuracy.

Cue Health receives $481 million from HHS to increase production of COVID-19 diagnostic tests
Cue Health has received funding from Johnson & Johnson (NYSE: JNJ)

$HLTH The U.S. government plans to buy about 6 million of the test swabs from CUE plus around 30,000 analytic devices to perform the patient sample testing analysis.

Cue $HLTH has received funding from Johnson & Johnson $JNJ and many others as well. (Disclosure: a colleague & acquaintance Ashish X is on the board of $HLTH and I have no position in the company).

In Dec 2020, $HLTH raised $235M at over $2B in valuation. It mentioned at that time that the Department of Defense, the NBA (National Basketball Association) were all customers.

With over 100 patents and over 1000 employees, the molecular diagnostics company has benefitted from the Covid19 test and ramped up revenue significantly.

$HLTH although the only test available now is Covid19, the company plans to launch (Late 2022) other tests as well.

$HLTH near term pipeline is strong and some of the other diagnostic tests are expected in 2021 as well.

Financials: Although 11+ years old, until 2020, $HLTH had no revenue. In 6 months of 2021 they booked $202M in revenue (+ Infinite YoY :). With 57% gross margins, they still managed $32M profit (Whoa) or $0.22 per diluted share. This is profitable company, but huge losses in 2019 (20M) and 2020 ($47M)

$HLTH has over $260M worth of convertible notes, however, so expect more dilution post IPO.

Risks: $HLTH is new, it is a young company which is scaling quickly thanks to the Covid19 – where it faces other competition as well. Although it is a 10 year old company, the production and ramp up has only begun in 2021.

$HLTH has not proven it can actually deliver all those other diagnostic tests as well. If the FDA revokes the EUA (Emergency Use Authorization) for Covid19, expect revenue to drop significantly.

In the near term (18 months) $HLTH is dependent on Covid19. Going by vaccination rates in the US, it seems like a safe bet, that they will continue to do well.

$HLTH depends on the US Department of Defense (DoD) for nearly 83% of revenue. This is another big risk. As part of their obligations to the DoD, they have to deliver 30K Cue readers and 6M Covid test kits. They currently have 100K per day manufacturing capacity in San Diego.

$HLTH has over 50 other diagnostic testing market competitors, many of which are much larger.

Valuation $HLTH has not mentioned its valuation, but it is expected to be between $3B and $4B (expected estimates) or higher. There are no growth metrics expected, but the DoD contract runs for 3 years. Commercial customers are also purchasing bulk Cue kits. At $3B this will be approximately 6X and at $4B 8X EV/Revenue, which is much higher than any other diagnostic competitor.

$HLTH has net income so the valuation metrics for EV/Net income should be 49X EV/Net Income at $3B valuation.

I am certainly going to watch this IPO closely. I am very interested in the $HLTH platform overall and keen to build a position for the long term

$BIRD Allbirds the shoe maker, files for an IPO, $219M 2020 Rev +31% YoY

$BIRD Allbirds, a shoe company based in San Francisco, founded in 2015 by Joe Zwillinger and Tim Brown. They filed for an IPO and are looking to raise $200 – $300M in funding at $3B-$4B in Valuation.


$BIRD is a global lifestyle (shoes and apparel) brand with a focus on sustainable shoes. In 2016 Time Magazine name their Wool Runner, the “Worlds most comfortable shoe”.

Allbirds Oiselle x Mia Saine Dasher Shoe Release

$BIRD online and direct to consumer channels account for 89% of their revenue, while 27 stores account for 11%.

Comfy Shoes Helped Allbirds Become a $1.4 Billion Company, but It's Never  Been Just About Shoes |
Allbirds founders

Since their founding $BIRD has sold 8 Million pairs of shoes to 4M customers worldwide, of which 3.3M are in the US.

Financial facts: 2020 $BIRD revenue was $219M +31% YoY, at 51.4% gross margins, generating $25M in losses.

Allbirds: How much is sneaker-seller really worth? | Fortune

Market Opportunity: $BIRD targets the $1.8T footwear and apparel market, ($366B in footwear alone).

Allbirds to Become More Sustainable Through Series D Funding Round –  Footwear News

$BIRD estimates their shoes cause 30% less carbon footprint than competitors sneakers. Thanks to this, they have a purpose driven brand and customer who are engaged and connected with the products.

Approximately 53% of $BIRD net sales in 2020 came from repeat customers.

$BIRD last raised $100M on Sep 2020 at $1.4B in valuation. Given the current brand hype we can expect $3B – $4B in valuation, which would imply a 15X – 20X EV/Revenue with negative EBITDA.

The biggest risks to $BIRD are counterfeit knockoffs are proliferating the market, the perception that the brand produces expensive products and it is a niche brand appealing to a very limited set of customers.

I am going to watch this from the sidelines. I like $BIRD and it has a cult-like following, but I am going to watch the post Covid and post IPO execution as a public company for 1-2Qs.

Allbirds Eyes Taking Firm Public With IPO |

If I do see acceleration in revenue and EBITDA I might be interested in $BIRD.

S1 filing.

New IPO Freshworks $FRSH – SaaS CRM company from Chennai India

$FRSH I first met Girish Mahtrubootham (Founder & CEO of Freshworks) in 2010 just a month after he started FreshDesk. We met at Infinitea Cafe in Bangalore. He had left Zoho, his previous employer to start his new venture FreshDesk.

Girish Mathrubootham (@mrgirish) | Twitter

Through the years I kept in touch via WhatsApp messages and emails to see the remarkable success story he created. This week $FRSH filed to go public, showing $308M in LTM revenue growing at 49% YoY. IT was last valued at $3.9B in Nov 2019. Expect a $7B – $12B valuation at IPO.


$FRSH makes Software-as-a-Service solutions for businesses to help them with sales, customer service and help desk automation.


The Customer Relationship Management (CRM) market is a $120B worldwide opportunity, with 100s of companies, most notably $CRM (Salesforce), $MSFT (Microsoft Dynamics), $SAP (SAP), $NOW (Service Now), and $ORCL (Oracle) dominating the enterprise segment.

CRM market share

In the Small and Medium business (SMB) segment, there are many other competitors including $ZEN (Zen desk), $HUBS (Hubspot) and many others who compete with $FRSH

In the Gartner magic quadrant from May 2021, $FRSH Freshworks is named as a Visionary, with the large companies occupying the “Leader” category.

Gartner's 2021 Magic Quadrant for the CRM Customer Engagement Center

$FRSH has 52K customers worldwide, and in 2020 reported $250M in revenue and $57M in losses. With 80% Gross margins, sustained growth over 10 years and a global presence, this stock should do well given good market conditions.


$FRSH operational metrics: DBNER (Dollar Based Net Expansion Rate) is 118% and while CAC and LTV metrics are not shared, the cost of sales and marketing is 45% of revenue. Over 11K customers spend more than $5K per year on their software.

The company is spending significantly in marketing to attract customers. Churn among customers certain industries which were affected by Covid was higher is what the company shared.

Dollar based net expansion by cohort

$FRSH company culture is explained using the acronym CHAT – Craftsmanship, Happy work environment, Agility with accountability and True friend of the customer. In addition they use the word Kudumba (family) which binds the team together.

$FRSH Competitors: $HUBS is growing at 30% YoY with $808M in 2020 revenue and is valued at $30B, while $ZEN is growing at 25% YoY with $1B in 2020 revenue, valued at $15B. At $7B in valuation, the company will be valued at 22X NTM EV/Revenue and will be in the mid point of valuation for SaaS companies at 50% growth. At $12B in valuation, it will be valued at 38X EV/NTM, making it among the top 5 richest valued companies in the SaaS space.

$FRSH largest shareholders currently are Tiger Global (26%), Accel India (25%) and Accel USA – Sameer Gandhi (25%). While founder Girish owns 7.8%.

I am going to buy $FRSH shares at IPO depending on the price and hold for a long period. I personally know Girish well, and few others members of his team as well are close friends. I expect them to continue to execute well.

Restaurant Payments and Software provider Toast $TOST files IPO, expecting $20B valuation

$TOST Toast a Boston based technology company providing payments and software for restaurants (competes with $OLO) filed to go public this week.

Contactless Payment Systems | Touchless Payment | Toast POS

$TOST Toast provide Point of Sale (POS) offerings and software to restaurants. It was founded in 2011 by Aman Narang, Jon Grimm, and Steve Fredette.

Toast | Restaurant Point of Sale & Management System

$TOST sells restaurant payment-processing hardware, including tablets and handheld devices, as well as cloud-based software to manage orders, payroll, and marketing.


According to Statista there are over 660K (860K according to $TOST) restaurants in the US alone, of which 48K (7% market share). The average restaurant makes about $125K per year, and spends 4% – 11% of revenues on Toast.


$TOST claims a $15B addressable market of which it currently does about $1.2B in revenue NTM (next twelve months). $TOST processes $38B in payments (Gross Sales via its platform) as of June 2021.

Restaurant Payment Software Provider Toast Files for IPO - TheStreet

In Feb 2020, $TOST raised $400M in funding at valuation of $4.9B. It recorded 100% revenue growth in the 1H of 2021 growing to $704M, as losses hit $235M increasing 88% YoY. Most recently in Nov, it allowed secondary sale of its stock by employees at a $8B valuation.

Toast founders

$TOST Toast takeout is the app the company provides to restaurants to help them grow online takeout and delivery options for consumers.

Getting Started: Toast Takeout

$TOST competes with $SQ Square, $LSPD Lightspeed commerce, and $FSV Fiserv in the payments market for restaurants. $OLO also competes with $TOST but focuses on offering chain restaurants end-to-end solutions instead of only segmenting independent restaurants.\

Boston restaurant software start-up Toast mulls US IPO, eyes $20 billion in  valuation

In April 2020, Toast cut its staff by 50% to 1300 after Covid, but by Nov 2020 it raised market valuation again $8B.

Getting Started with Toast Capital

$TOST also lends money to restaurants using Toast Capital (similar to $SQ Loans and Lend).

What made Doordash, Olo and Toast IPO-ready?

At $20B valuation, $TOST will be valued very rich at 6.6X NTM gross profit (nearly 3X $SQ) and nearly 13X NTM revenue (not a good measure given low gross margins) for 100% Covid fueled recovery.

Key risks for $TOST are very low gross margins (10% aggregate) and less than 9% gross margins in payment business, very competitive landscape for restaurant software, payments and high churn rate of restaurants (11% of customers go out of business each year) and slower growth going forward from Covid recovery easing out.

Toast launches Toast Capital to provide fast and flexible funding for  restaurants | Tech News | Startups News

I am going to watch $TOST but not take a position yet. S1 filing indicates late September IPO.

Weber Grill IPO $WEBR $750M IPO, selling 47M shares at $16, M CAp $5.5B

$WEBR Outdoor Bar B Q grill maker and 75 year old company Weber filed to go public looking to raise $750M at $5.5B Market Cap.

Weber grills

Weber makes makes 7 types of grills – Charcoal, Gas, Smokers, Pellet, Electric and Tech-enabled grills.

Weber Genesis II S-435 4-Burner Propane Gas Grill Stainless Steel 62006001  - Best Buy

$WEBR has grown dramatically thanks to the pandemic, recording 17% YoY growth to end 2020 (Sep) at $1.5B in revenue with 43% Gross Margins (+78% YoY) and $150M in Net profit

The market for grills is about $5B in 2020, growing at 5% YoY, and is expected tor each $7B by 2025 and $WEBR Weber has over 25% market share.

Residential Electric Grill Market Forecast, Trend Analysis & Competition  Tracking - Global Market Insights 2019 to 2029

Competitor Traeger $COOKhas also filed to go public.

$WEBR plans to use proceeds to pay down debt of $220M and for other corporate purposes.

What's the Date For the Weber Grill IPO? Key Details Are Still Pending

Valuation: While EV/Rev is not a valid metric, it is 2.98 and with EPS of $0.47 the Covid growth rate of 61% might slow causing shares to form a base to grow into the valuation, given the EV/EBITDA will be about 26.

Outdoor grill maker Weber firing up $8 billion IPO

$COOK is valued higher given its 100%+ Growth rate during the pandemic and is at EV/Rev of 4.4 and EV/EBITDA at 32.

The biggest risk to $WEBR is slower growth post the pandemic tail winds. I expect this to be a steady performer, but not a growth stock. At this point I dont plan to take a position, but it will return 10% – 25% annual would be my expectation.

Covid Barbecue Craze Goes to Market With Weber, Traeger IPOs - Bloomberg

New IPO Riskified $RSKD $3.3B Market Cap, $200M Rev, growing at 45% YoY

$RSKD Riskified, a software and services company focusing on payments industry, helping eCommerce vendors reduce fraud from online transactions, went public last week at $21 valuing the company at $3.3B.

Riskified founders Eido Gal and Assaf Feldman  / Photo: Tal Orani

$RSKD Riskified was founded in 2012 by Eido Gal (CEO and Assaf Feldman (CTO). It has raised over $70 M from General Atlantic, Fidelity Management and others

$RSKD core product is Chargeback Guarantee which automatically approves or blocks online transactions. Riskified’s business model is to collect a percentage-based fee on gross merchandize value (GMV).

Air Europa Selects Riskified PSD2 Optimization to Maximize Revenue and  Improve Customer Experience

$RSKD In the second quarter of 2021, Riskified expects revenue of $54.8-$55.7 million, up 46% from the corresponding quarter of 2020. Gross Margins are in the 53% – 54% range.

$RSKD Gross profit in the second quarter is expected to be $30.1-$33.7 million, up from $20.1 million in the corresponding quarter of 2020, while the operating loss is predicted to be between $900,000 and $5.5 million, narrowing from $7.7 million in the second quarter of 2020. 

$RSKD Net loss in the second quarter of 2021 is expected to be $19.4-$24.8 million compared with $7.3 million in the corresponding quarter of 2020.

$RSKD While no public competitors exist, there are 10-15 startups including Forter, ClearSafe, Kount and Sift Science.

Riskified (@Riskified) | Twitter

The market for fraud prevention is expected to grow from $20B in 2020 to $38B by 2025.

Fraud Detection and Prevention Market Size, Share and Global Market  Forecast to 2025 | COVID-19 Impact Analysis | MarketsandMarkets

There are 5 products that Fraud detection and prevention vendors offer:

Automated Workflows

Automates the sending of order details, payment fraud checks, blocking of suspicious devices, fulfillment, cancellation of fraudulent orders, and more so merchants can review even a high volume of orders quickly.

Machine Learning

Uses real-time insights that are fed into the machine learning models. Machine learning does faster and more complex calculations across a much wider range of online fraud signals when compared with manual review.

Insights Dashboard

Insight dashboards report synthesize relevant fraud prevention data, display algorithmic conclusions where given, and highlight suspicious activities via a single, easy to use interface. This means there is no need to switch between multiple views to see all relevant information, in turn making it much easier to organize and effectively execute a fraud prevention process.

Device Fingerprinting

Device fingerprinting is the technique of recording information about the device a shopper uses when placing an order. A wide variety of data points are analyzed, including things like the computer’s operating system, the browser the shopper used during check out, and even the language options installed. The information collected is then used in a risk assessment to identify fraudsters. For example, a shopper claiming to be from a country whose national language is not installed on their computer can indicate the shopper is using a VPN to hide their true location.

Chargeback Guarantee

Chargeback guarantees are a contractual obligation on the part of a fraud prevention solution to cover the cost of any chargebacks incurred by a merchant using their platform. When merchants use a fraud prevention solution that offers one, they never have to pay the cost of a chargeback themselves.

Riskified (@Riskified) | Twitter

Growth and valuation

$RSKD expects to do $210M – $220M in FCY21 revenues, growing at 51% YoY. At the current price of $26, it is valued at $3.45 Billion giving it roughly 16X P/S for 2021. Given the growth, and comparables at 17-19X SaaS valuations, at 60% margins, $RSKD is fairly valued.


$RSKD Risks include the ability for payment vendors ( $PYPL $SQ and $AFRM among others) to include these “features” or fraud detection with their core product. Second, the slower growth expected post Covid for eCommerce GMV.

$RSKD I think the valuation and numbers are good for an initial starter position under $25 with a risk of falling to $21 (IPO price)

Top email newsletters I would recommend on Finanace and stock markets

Since many folks ask me about recommendations for email newsletters I read and follow, I thought I’d put together a list. I subscribe to over 300 and get daily updates from 50, of which I skim about 40 and read 20 daily in detail.

Here in no particular order.

Top SubStacks which I like (in no particular order)

  1. Protocol Source Code

Why: A good view into tech in the early stage


  1. Exec Sum

Why: Summary of M&A, early IPOs and private investments


  1. Accelerated By Justin Moore

Why: Early technology startup view and summary


  1. Alphacharts

Why: Charts and Brian’s view into trending 


  1. Allegory of Finance

Why: High level thinking and investing mindset


  1. NZS Capital

Why: Great summary of the best links in technology and finance


  1. CB Insights

Why: Funding news on Unicorns


  1. The Compound Newsletter

Why: Data rich view into stocks that are moving


  1. Clouded Judgement

Why: A view into comps for cloud / SaaS companies from Jamin Ball


  1. Digital Native – Rex Woodburry

Why: Emerging creator economy VC with a view on upcoming trends


  1. Farman Street

Why: Self help


  1. Fintech Brain Food

Why: The best fintech roundup from Europe and beyond


  1. First Round Review

Why: Great content from founders on how to get started with startups


  1. Hedge Fund Insight by Yvonnne

Why: She picks a new hedge fund each week and talks about their holdings and why


  1. Hacker News Letter

Why: Keep on top of new things that developers are interested in


  1. Investopedia the daily

Why: Quick summary of daily highlights


  1. Jonah’s Growth Stocks

Why: He’s a good guy and finds some good winners early


  1. KnowHow Capital

Why: Macro insights into market movers


  1. Macro Markets Daily

Why: Visually attractive macro data in 2 minutes


  1. The Irrelevant Investor

Why: Michael Batnick has some good insights on stock movements


  1. NFX – Network effects

Why: To understand marketplace companies such as $UBER $FVRR


  1. Net Interest Marc Rub einstein

Why: Fintech insights


  1. Rob’s Educated Guess

Why: Rob is super smart and an experienced Hedge fund investor


  1. SPAC Track

Why: Daily Summary of SPACS


  1. Software Stack Investing

Why: In depth analysis and breakdown of software companies


  1. The Exponential View

Why: Out there thinking very forward looking


  1. The Hard Fork by Marvin Liao

Why: Silicon Valley insider news


  1. The Long Game by Mehdi Yacoubi

Why: Links to some long reads on the future


  1. What’s hot in enterprise and VC?

Why: Enterprise SaaS company investing but early stage


  1. Week in Ethereum

Why: Roundup of all #ETH News


New IPO $DIDI Didi Global, $UBER of China, ridesharing leader

$DIDI is going public on June 30th, selling 288M shares at $13 – $14 per share, raising $4.5B at $63B to $68B. $SFTBY (Softbank) $UBER (Uber) and $TCHEY (Tencent) are among the biggest shareholders. $AAPL (Apple) is also an investor.

$DIDI my big fear is revenue recognition is inconsistent, which makes valuations and metrics seem better than they are. That’s the biggest risk.

Didi IPO: How to Trade on Didi's IPO | CMC Markets

$DIDI was founded in 2012 by Will Wei Cheng, merged with Kuaidi in 2015 and acquired $UBER China in 2016. It operates in China, Brazil, Mexico and 11 other countries.

Didi files to raise US$4 billion in New York IPO, helping China's dominant  ride-hailing app catch up with Uber in value | South China Morning Post

Didi Chuxing $DIDI is the leader in the Chinese shared mobility sector, which is over $300B and growing as a market.

$DIDI revenues were down 8% in 2020 thanks to Covid, but were growing over 20% before. China mobility still accounts for over 90% of revenue.

$DIDI gross margins are in the 10% – 12% range and albeit small, have scale on their side.

At 24X last 12 months gross profit, the valuation for $DIDI is rich, but if growth can go back to over 20% YoY from 2022, this current price of shares might be a good value.

New IPO Turkish eCommerce Marketplace Hepsiburada D-market $HEPS (compared to $CPNG $OZON $JMIA )

D-Market, $HEPS Hepsiburada, the #3 eCommerce marketplace in Turkey, is going public on Jun 30th, seeking to raise $680M at $3.9B Market cap. The company did $2.4B in GMV and $751M in revenue growing at over 100% YoY.


$HEPS is selling 41.67M shares at $13. In terms of valuation, they are the lowest of the entire regional eCommerce companies and much better than $OZON or $CPNG from a valuation and growth standpoint.

Valuation and Growth

$HEPS makes 43% gross margins and like most eCommerce companies is branching into logistics, payments and local delivery. They aim to be a super app in Turkey.

Turkey is not a very large market with $60B in eCommerce and $250B Retail, but it has 24% penetration of eCommerce and growing. Compared to Turkey, $CPNG operates in South Korea with a $543B Retail market.

Hepsiburada is actually #3 in the market (although they claim to be #2 by some metrics). and are the largest 2 players.

I think the stock will do well given the valuation metrics. It is valued lower than comparable players, is growing quickly and has a little attention from retail and wall street.

I am yet to make up my mind on if I I will take a position at the IPO.

Risks: Small TAM (Turkey alone), Regional and political issues (similar to $OZON) and a number 3 player in a small market.