A Big E-Commerce IPO

Written by Jennifer Clark
Posted July 29, 2020

The Austin, Texas-based e-commerce company BigCommerce is expected to go public next week on Wednesday, August 5. 

The company is taking the steps to go public during a time when e-commerce is a part of everyone’s everyday lives. In general, it’s easier to shop at home than going into malls or shopping centers, and with the coronavirus enacting new health mandates and procedures to help prevent the spread of the virus, e-commerce has become even more popularized. Because most of the U.S. has issued stay-at-home orders for months, people have had to change their routines and adjust to a new lifestyle, resulting in online shopping to become the new norm. 

BigCommerce is a rival of Shopify (NYSE: SHOP), one of the year’s best-performing stocks, up more than 140%. The company is a Canadian multinational e-commerce company with headquarters in Ottawa, Ontario. It's reported that it has more than a million businesses in about 175 countries that use its platform, and by looking at Shopify’s successes throughout the years, it can provide some insight into what we can expect from BigCommerce.

BigCommerce’s software platform helps entrepreneurs get their e-commerce business started. It gives a place for these businesses to set up their online stores, and there is currently investor demand for software and internet companies like Shopify and BigCommerce, especially given the current climate with more people buying online.

The company’s primary SaaS platform is a tool that gives both large and small businesses the ability to set up and manage their online store. The company bills its customers regularly, either monthly or annually. The cheapest standard plan comes in around $30 per month. Some of the company's clients are well-known brands you’re most likely familiar with, like Sharp Electronics, Ben & Jerry’s, Skullcandy, Murad, Bliss, Dremel, and Toyota, just to name a few.

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BigCommerce filed its S-1 in mid-July. The company is fairly new — founded in 2009 — but has some notable investors like General Catalyst and SoftBank. By 2024, eMarketer expects total e-commerce spending to hit $6.3 trillion. Yes, trillion.

Just like a lot of other venture-backed startups, BigCommerce doesn’t appear to be profitable. As of March 31, 2020, it reported annual recurring revenue of $137 million, which was up from the $128.5 million it reported on December 31, 2019. However, more recently it reported $33 million in revenue for the first quarter of 2020 — up from $25.5 million during the same period of the previous year. It also reported a $4 million in losses for the first quarter of 2020, which is a decrease from $10.5 million in losses in the first quarter of 2019.

BigCommerce has been able to raise $64 million in its Series F round of funding that was led by Goldman Sachs. BigCommerce is expected to go public on Wednesday, August 5 and it currently has an IPO price target between $18-$20 per share, putting its IPO to earning about $130 million. Underwriters for BigCommerce’s IPO include Morgan Stanley, Barclays, Jefferies, and KeyBanc. It has filed to list on the Nasdaq under the ticker symbol “BIGC.” 

There’s an outstanding opportunity for growth when it comes to BigCommerce, especially with the continued shift towards online commerce as one of the leading factors for growth.

BigCommerce could be on a path to success that's similar to Shopify's recent successes. Keep an eye out for this IPO that’s set to happen next week on August 5.

Until next time,

Jennifer Clark
Pro Trader Today
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