Samsara IPO: what you need to know

By Kirsteen Mackay

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Cloud-managed networking and IoT provider Samsara is due to IPO on Wednesday December 15, here's what you need to know.

Cloud-managed networking leader Samsara is planning an initial public offering (IPO). The highly-anticipated Samsara IPO is due to take place on December 15. Back in September, the company submitted a brief press release notifying the public of its confidential IPO filing with the SEC. Now it appears the company is seeking an $11.5bn valuation.

Samsara serves businesses with its suite of Internet of Things (IoT) solutions. This includes fleet monitoring, real-time GPS tracking and management software for vehicle operations. Some of its happy customers include Kelly Group, Allan Reeder, Bretts Transport, Collins Earthworks and Armstrong Richardson.

When will Samsara go public?

In September, Samsara’s press release announcement stated the company submitted a confidential draft registration statement on Form S-1 proposing an IPO of its common stock.

As this was a confidential IPO, Samsara did not have to disclose any sensitive information to the public, thereby affording it flexibility in its process. Three months later and the SEC has undertaken its review process stating the company will go public on Wednesday, December 15.


Check out our handy ‘What is..?’ guide to confidential IPOs


Now more details have emerged and can be read in Samara’s official IPO prospectus filed with the SEC on EDGAR on December 6, 2021.

Firstly, Samsara has snapped up an appropriate and impressive ticker symbol in IOT. This stands for Internet of Things and sums up what the company’s all about, making it an easy one to remember. It intends to list on the New York Stock Exchange (NYSE).

Sales overview

Samsara’s revenue more than doubled between fiscal 2020 and fiscal 2021 (ending 30 January 2021). Indeed, it rose from $119.9m to $249.9m, rising 108% year-over-year.

This trend continued throughout 2021, with a 74% year-over-year rise in sales during the first three quarters. That’s up from $174m during the first nine months of 2020 to $302.6m in the first nine months of 2021.

Not yet profitable

Unfortunately, Samsara is not yet a profitable company, so although revenue growth is impressive, until it can turn a profit its attraction is muted. Nevertheless, losses appear to be declining. Samsara reported net losses of $225m in fiscal 2020 which dropped to $210m in fiscal 2021. Losses in the first nine months of 2021, reduced 41% year-over-year to $102.3m. However, Samsara has also confirmed it expects losses to continue for the foreseeable future.

Total Assets and Liabilities

By October 2021, Samsara had grown its total assets to $839.5m. But during this time, it’s also seen its liabilities increase to $519.7m.

Declining Cash reserves

Unfortunately, Samsara’s cash flows are also declining. In February this year, Samsara recorded $400m in cash, by October 30, this had declined to $267.5m.

Investor backing

Morgan Stanley, Goldman Sachs and JP Morgan are leading the Samsara IPO, with many more prominent names involved too. This includes RBC Capital Markets, Wells Fargo Securities, and Evercore Group while Marc Andreessen is a named Director.

Last year the company was reportedly looking at a $5.4bn valuation, this has now more than doubled to $11.5bn.

Samsara is offering 35m shares of its Class A common stock at an estimated offering price per share of $20 to $23.

How Samsara makes money

Samsara focuses on internet-of-things technology (IoT), providing sensors and other IoT solutions to manage vehicle fleets and industrial operations.

The company effectively bridges the gap between the physical and digital worlds bringing global supply chains into the modern age. It powers over 2 million networks worldwide while modernizing and digitizing physical operations using the cloud.

Samsara IoT IPO

The company helps 20,000 customers in areas such as transportation and logistics, food production, energy, construction, and local and state governments.

In 2019, Samsara’s revenue reached $243m with 15k customers. In January 2021, it announced it had surpassed $300m in run-rate subscription revenue over five years while also enjoying over 80% annual growth in Q4 ending Jan 30.

Samsara’s client list includes Sherwin-Williams, PODS, City of Sacramento, City of Boston, Goodfellow Bros., MacAllister Machinery, Kelly Group, Clean Harbors, and Liberty Oilfield Services.

When was Samsara founded?

Founded in 2015, Samsara is led by the co-founders of Meraki, an IT company acquired by Cisco Systems (NASDAQ: CSCO). This fact alone is bound to make it an attractive prospect for speculative investors.

The company is headquartered in San Francisco with offices in San Jose, Atlanta, and London.

Samsara manufactures hardware, software, and cloud systems to ensure a wide array of businesses operating in the global supply chain run safely, efficiently, and sustainably.

Physical operations support and drive the entire global economy. Bringing it into the 21st century with a streamlined data-driven approach is vital to business security and sustainability.

Earlier this year, Sanjit Biswas, Samsara co-founder, and CEO said:

“Our customers are on the front lines of keeping the world’s economy and infrastructure running. Over the past year, we have seen customers accelerate their adoption of technologies that provide real-time visibility, remote coaching and workflows and technology integrations that are more critical than ever in the current environment.

AI site powered visibility

Preventing theft with site visibility, Samsara’s plug-and-play solutions include remotely operating security cameras at work sites. The company also provides safety detection sensors with remote operating capability. For instance, notifications can alert office staff elsewhere if forklifts, machinery, or people access an out-of-bounds area or trigger an accident. It can also ensure management can detect if site staff are not wearing their correct PPE.

Samsara’s innovations ensure enhanced visibility over sites via its cloud-connected video solution. This greatly improves safety standards and streamlines operations. Products also include video-based safety for drivers, vehicle telematics, and equipment monitoring.

Featured on The Forbes Cloud 100 list

Samsara recently earned the 19th spot on The Forbes Cloud 100 list. This is the third year running Samsara has featured on the list, and management deems it a great honor to be recognized by Forbes.

This is an interesting company operating in a crucial sector pivoting to the modern age. There's no doubt Samsara is an exciting IPO to watch as the year draws to a close.

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In this article:

Topics:
IPO
Industries:
Information Technology
Communication Services

Author: Kirsteen Mackay

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Kirsteen Mackay does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Kirsteen Mackay has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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