Investment Opportunities

Procore IPO Recently Filed With SEC

Last year, investors were prepared for a Procore IPO. Rumors surfaced in 2019 as the company prepared to go public. Investors expected the IPO to come toward the end of 2020.

But it’s here now. Recently, Procore filed with the U.S. Securities and Exchange Commission. And since Procore is an investment unicorn, a lot of investors are eager for the opportunity. Here’s what we know…

Procore IPO: The Business

A Procore IPO was recently filed with the SEC.

Craig Courtemanche founded Procore Technologies in 2002. The California-based company provides construction management software. It gives access to project information, simplifies workflows and allows collaboration among project stakeholders.

Construction is one of the oldest and least digitized industries. Procore is leading the industry to the future with its cloud-based technology. In fact, 86% of accredited U.S. construction management programs teach students about Procore platforms.

The company’s mission is “to connect everyone in construction on a global platform.” In 2017, the construction industry represented 13% of global GDP and employed 7% of the global workforce. And analysts estimate it could be worth $14 trillion by 2025.

Procore offers four product categories, allowing customers to manage each step of a project.

  • Preconstruction
  • Project Management
  • Resource Management
  • Financial Management

Now, after months of waiting, Procore announced it filed an S-1 form with the SEC for a Procore IPO.

Procore Revenue and Opportunity

When Procore looked at going public in September, reports valued the company at $3 billion. Now Procore looks to push that value to $4 billion with its IPO.

In recent years, Procore has seen consistent growth in customers. Internet, Wi-Fi and mobile devices are more accessible, allowing the construction industry to use more technology. And with that growth comes revenue.

Procore’s revenue comes from customers subscriptions. In 2017, revenue was $112.3 million. That number grew to $186.4 million in 2018 and $289.2 million in 2019. That’s year-over-year growth of 66% and 55%, respectively. In 2019, 63% of Procore revenue came from existing customers.

Procore customers operate in more than 125 countries. In 2019, 11.3% of revenue came from outside the U.S.

The company believes it offers a unique approach to construction management. Procore’s platform is user-centric, designed for easy use and access. And the company has more than quadrupled the number of products offered, going from four in 2017 to 13 in 2019.

Moving forward, Procore believes customers will sign up for more products. As of December 31, 2019, 59% of customers were subscribed to three or more and 41% to four or more. The company believes those percentages will increase as Procore continues to meet the needs of customers and the industry.

Another growth strategy is acquisitions. Since 2018, Procore has acquired four companies using $171.6 million in cash and stock. However, the company still has $121.8 million in cash and cash equivalents on its balance sheet.

So the Procore IPO seems like a solid investment opportunity. But as always, let’s look at the risks.

Procore S-1 Filing Lists Risk Factors

When Procore first looked at going public in September, big unicorn startups were failing. Uber and Lyft both tanked, and WeWork backed out at the last second. These failures scared not only investors but potential IPOs as well.

That’s why Procore was sure to highlight the risks in its S-1 filing. Some of the risks include…

  • Failure to properly manage future growth
  • History of losses and failure to sustain profitability
  • Changes in economy and industry
  • Risks with international expansion
  • Changes in customer demands and preferences.

However, unlike Uber and Lyft, Procore has more than an industry name and majority market share. The company has proven to be profitable. Though it acknowledges that could change, it puts the Procore IPO one step ahead of the rest.

So now the big question…

When Will Procore IPO?

While there is a filing, Procore has not announced a date, share number or share price. The IPO process takes time and money. But markets are also dangerously low as more countries quarantine for the coronavirus. So while the exact date isn’t known, it likely won’t be soon.

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Procore’s Series-1 funding could give investors an idea on pricing. Preferred stock share prices were $37.57. That could be useful to keep in mind when looking for the Procore IPO.

 


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