monday.com Ltd. (MNDY), a manufacturer of workplace software, went public on June 10, 2021 to increase Working capital for business expenses, including advertising and marketing, and technology development. One percent of the proceeds from the initial public offering (IPO) were also made available to the monday.com foundation, a non-profit initiative launched by its founders.
monday.com calls its product a workstation operating system (OS), which provides the building blocks for companies to integrate new functions, from project management to departmental processes, into their business. The distinguishing feature of monday.com software is the simple user interface that requires minimal programming knowledge.
During the IPO, monday.com offered 13.7 million shares to the public at a price of $ 155 each, which was above the $ 125 to $ 140 price range. The stock opened at $ 173.5 on the NASDAQ and climbed to a high of $ 182 during the day. At the end of its first day of trading, monday.com had raised $ 574 million and had a market valuation of $ 7.5 billion. Since its debut, monday.com shares peaked at $ 233.25 on June 23, and trade at $ 198.27 on July 20.
Krispy Kreme, Inc. (DNUT), a maker of donuts and other sweet treats, offered 29.4 million shares on July 1 at a price of $ 17, down from the previously announced range of $ 21 to $ 24. The company expected to raise approximately $ 4 billion from the markets. At the end of its first day of trading on NASDAQ, Krispy Kreme’s shares were trading at a price of $ 21. It had raised $ 500 million from the markets for a valuation of $ 2.7 billion.
Krispy Kreme stocks have been on a downward trend since going public and have never hit their debut high. They change hands on July 20th at $ 16.27. In his S-1 filing, Krispy Kreme said it will use the proceeds from its IPO to pay off its sizeable more than $ 1 billion debt and general business expenses.
The central theses
- monday.com is a workplace software company and Krispy Kreme is a donuts and sweet treat company.
- monday.com went public under the ticker of MNDY on June 10 and Krispy Kreme went public on July 1 under the ticker of DNUT.
- monday.com had sales of $ 161 million and a loss of $ 152 million last year. Krispy Kreme had sales of $ 1.1 billion and a loss of $ 60.9 million.
- Both companies have received different reactions from investors. While monday.com has received positive coverage and rating from investors and analysts, Krispy Kreme has struggled with mixed feedback and a relatively muted reception in the public markets.
monday.com foundation and history
monday.com was founded in 2012 by Roy Mann and Evan Zymann. Both founders had started businesses for a short time before coming together to work at monday.com. Mann was an executive at Wix.com, a code-free website building company, when he developed the first version of monday.com to solve project management problems for his company. He brought in Zymann, who worked at a cellular company, to scale the solution. They launched a working product in 2014. In its previous avatar, monday.com was known as dapulse and was renamed after it began expanding internationally in 2017.
monday.com is part of a growing suite of applications that require minimal or no programming skills to implement and operate. Such products span a wide variety of industries, from the website company WordPress to the project management tool Asana. Research firm Gartner has stated that 65% of application development will be no-to-low code by 2024. While monday.com started out as a project management solution, it has evolved into an all-encompassing solution that integrates multiple functions related to running a business, such as: B. Human Resources and Finance.
Krispy Kreme founding and history
Krispy Kreme has a much more storied history. The chain was founded in 1937 and is considered a “national treasure”. This is the company’s second inning in public markets. It went public during the dot-com bubble in 2000, when its stocks popped 76% on the first day of trading. An examination of the Securities and Exchange Commission (SEC) cut its share price to US $ 1 in 2004 due to accounting irregularities. Management problems and a subsequent social shift away from sugary foods to health-conscious alternatives also shook business. Krispy Kreme went private in 2016 after being bought by a subsidiary of a German investment firm JAB Holdings Company for $ 1.35 billion.
During his time outside the public markets, Krispy Kreme has focused on growing its offline and online retail presence and reinventing its brand. It also acquired a majority stake in Insomnia Cookies, a millennial-focused cookie maker, and opened more locations overseas.
According to its S-1 filing, Krispy Kreme has increased its physical presence from 5,842 locations in March 2020 to 9,077 by April 2021. These locations are spread over 30 countries. The company has moved away from its previous franchise model and now directly owns 86% of the total number of its branches.
Last year, Krispy Kreme opened a 24-hour flagship store in New York’s Times Square with a glazed waterfall that allows customers to see the original glazed donuts being made in real time. The store aims to capitalize on the enthusiasm for experiences via social media.
monday.com financial metrics
monday.com had annual sales of $ 161.1 million in 2020, 106% more than in 2019. In 2018, the company’s revenue was estimated at $ 50 million. Enforced guidelines for remote working for the COVID-19 pandemic have become an accelerator for the company’s business. In addition to an increase in sales, the number of customers at monday.com rose sharply.
At the end of 2020, monday.com had 113,888 customers, up 151% from January 1, 2019. A Forbes profile of the Israeli company says it had 120,000 customers as of June 2021. Since monday.com’s revenue is dependent on recurring billing, an increase in customer numbers is a good sign. The company’s customers are spread across 200 industries and 190 countries, with 52% of monday.com’s sales in 2020 coming from customers outside the United States.
Monday.com’s jump in revenue was accompanied by steeper losses, which multiplied from $ 91.6 million in 2019 to $ 152.2 million in 2020. These numbers are mainly the result of increased operating expenses. Marketing costs increased 61.4% to $ 191,353 between 2019 and 2020, and administrative costs increased 251.5% to $ 54,339. The focus on operating expenses and attracting new customers means the company has a negative balance sheet operating margin of -93.43% at the time of this writing.
But the company Gross margin is positive. In the first quarter of 2021 it was 89.2%. At the end of 2020, monday.com had $ 40.6 million in cash, up from $ 38.4 million in 2019.
Like most of them Software-as-a-Service (SaaS) Company that monday.com relies on Deferred sales as an accounting tool in the balance sheet. Accrued revenue refers to revenue recognized over the next 12 months based on monthly subscription contracts. As of December 31, 2020, monday.com had accrued revenue of $ 70.7 million compared to $ 40.9 million the previous year.
|monday.com financial metrics|
|FY 2019||FY 2020|
|Revenue ($ million)||78||161.1|
|Net Loss ($ M)||91.6||152.2|
|Deferred Sales ($ M)||40.9||70.7|
Krispy Kreme financial metrics
Krispy Kreme had sales of $ 1.1 billion in 2020, up 17% from 2019. That number was a slowdown from last year when it was up 22% on annual sales of US 959.4 million Dollars. For the final quarter, which ended in April, the company reported a 23.1% jump in revenue from 2020 numbers to $ 321.8 million. One-third of Krispy Kreme’s sales in 2020 were outside the United States, and e-commerce accounted for one-fifth of all sales.
Spending by the North Carolina company has kept pace with the rise in sales. For example it is Sales, general & administration (SGA) and operating expenses increased 34.4% and 65%, respectively, between 2019 and 2020. These skyrocketing spending resulted in a net loss of $ 60.9 million. For the most recent quarter, the company posted a net loss of $ 0.3 million compared to $ 11 million a year ago, primarily due to income tax benefits.
Krispy Kreme was $ 1.2 billion in debt as of April this year. It used 4.3% of its total revenue for the quarter to pay interest on that debt. Last year, interest expense on debt was 5.1% of annual revenue, according to the company’s S-1 filing. Krispy Kreme had $ 50.6 million in cash for the last April quarter, up from $ 37.4 million in January.
|Krispy Kreme financial metrics|
|Q1 FY 2020||Q1 FY 2021|
|Revenue ($ million)||$ 261.2||$ 321.8|
|Net loss ($ M)||$ 10.9||$ 0.3|
How much is monday.com worth?
According to Crunchbase, monday.com has raised a total of $ 234.1 million in six financing rounds in private markets. Prominent investors in the company included Entree Capital, based in London and Hamilton Lane. In 2018, it was valued at $ 550 million. As of July 2019, when monday.com raised $ 150 million from investors in a Series D round, monday.com was worth $ 1.9 billion.
Just before monday.com went public, Cloud Customer relationship management (CRM) from salesforce.com, inc. (CRM) Venture arm and video conferencing company Zoom Video Communication, Inc. (ZM) bought $ 75 million worth of shares in the company at the public offering price, according to a government motion. The rapid rise in monday.com’s valuation has continued in the public markets. At the end of the first day of trading, monday.com was worth $ 7.5 billion. By the close of trading on July 19, 2021, the valuation of the same company had risen to $ 9.2 billion according to market estimates.
Like most tech entrepreneurs who have publicly traded companies, the monday.com co-founders have retained their veto power over business-related matters related to the company.
How much is Krispy Kreme worth?
Krispy Kreme was privatized by JAB Holdings in 2016 as part of a $ 1.35 billion deal valued at $ 21 each. The company was hoping for a valuation of $ 4 billion on its return to the public, but the reaction from analysts and securities firms was largely unenthusiastic, ending its first day of trading with a valuation of $ 2.6 billion. At the close of trading on July 19, the company was valued at $ 2.77 billion.
Analysts and commentators argue that the company’s soaring losses – $ 12.4 million in 2018, $ 34 million in 2019, and $ 60.9 million in 2020 – are evidence that the Increase in sales occurred at the expense of net profit.
Since going public, JAB Holdings has asserted itself as the company’s largest shareholder. A subsidiary of JAB Holdings paid $ 94.3 million for 5.9 million shares on July 6, bringing the total number of its shares to 68 million. The investment firm also holds the voting rights for Krispy Kremes Common stockso that she has the decisive say in shareholders’ votes. From this point of view, the company will also be able to influence the management strategy and the composition of the board of directors.
monday.com main competitors
monday.com claims to have created a new product category called the Workplace Operating System. This operating system encompasses and integrates applications in several departments of an organization. The list of competitors is therefore long and includes cloud applications for various departments.
For example, privately owned Asana is a project management tool that has a similar target market and interface to monday.com. The investor salesforce.com can also be viewed as a competitor, as its product suite also offers the customer relationship software offered by monday.com. Other companies listed as competitors in the company’s S-1 filings include remote desktop company Citrix Systems, Inc. (CTXS) and Atlassian Corporation Plc. (TEAM), which makes project management software.
Krispy Kreme’s main competitors
The competition for Krispy Kreme is in the form of other donut sellers and coffee shops or chains selling similar products to the Krispy Kreme portfolio. Included in that list are large publicly traded multinational chains such as Starbucks Corporation (SBUX) and local donut shops with a strong regional presence. An example of the latter is Portland, Oregon-based Voodoo Donuts, which is expanding its offices in the United States and acquiring an investment from Fundamental Capital, a San Francisco-based private equity firm, in 2017.
The bottom line
Workstation software maker monday.com and donut maker Krispy Kreme went public in June and July, respectively. Both IPOs received dramatically different reactions from investors. monday.com saw an increase in the offer price and rating. Krispy Kreme’s IPO experience wasn’t that sweet. The donut maker’s shares were below expected range, and their valuation has not changed significantly from monday.com since going public.
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