Monday.com will celebrate its IPO on the Nasdaq on June 10, 2021.
When Zoom went public two years ago, Salesforce tied a bundle by investing $ 100 million at asking price and watching the stock rise out of the gate. Zoom learned a little from this experience.
Zoom and Salesforce each bought $ 75 million in shares in Israeli software company Monday.com, which debuted Thursday on the Nasdaq. Monday.com, which offers cloud-based collaboration tools, had no pop at Zoom level, but the stock rose 15% – from $ 155 to $ 178.87 – which gave both investors quick paper profits.
By the close of trading, Zoom and Salesforce’s stake had grown to $ 86.55 million, each representing a daily profit of $ 11.55 million. Like Monday.com Insiders, Zoom and Salesforce have lockout restrictions and cannot sell for 180 days.
For Salesforce, buying IPO stock is another way for its venture arm to generate returns that go beyond traditional late-stage investments in startups and tech companies. In addition to investing in Zoom and Monday.com offerings, Salesforce invested $ 250 million in the IPO of Snowflake last year, a stake that more than doubled to $ 529 million on the database company’s first day of trading.
In 2020, Salesforce posted $ 2.17 billion in annual profits from its investments, mostly from Snowflake and software provider nCino, a company that helped Salesforce long before it went public last year. In previous years, Salesforce Ventures invested in the IPOs of Dropbox and SurveyMonkey.
Investments are new business at Zoom. In April, the video chat company launched a $ 100 million fund to help startups that would build features and functionality on top of Zoom. These deals will be much smaller, however, as Zoom’s investment in Monday.com represents 75% of the total fund. According to PitchBook, this is Zoom’s first known investment of any magnitude.
While a 15% jump in a day is certainly attractive, it’s well below the kind of pops the market has seen in recent years and enjoyed by Salesforce. IPO prices have tightened overall this year after massive gains on the first day of 2020 at Snowflake, DoorDash and Airbnb led to heightened criticism that companies are leaving too much money on the table to sell cheap stocks to new investors to hand over.
CLOCK: Bill Gurley on the IPO market