The dual edged sword of going public is the immediate feedback it gives. Last week, I wrote that MuleSoft was joining elite company from a SaaS metrics perspective and could comfortably garner a valuation to match. After a few days of trading, investors clearly liked what they heard on the roadshow and MuleSoft is now one of the highest-multiple SaaS stocks I follow, with only Shopify garnering a higher multiple of enterprise valuation to gross profit, my preferred valuation metric for SaaS companies. This is a strong sign for other high growth software companies considering potential IPOs- perhaps unsurprisingly given strong recent performance, the market is willing to reward strong SaaS metrics with the premium valuations they deserve. We'll get another test soon as Okta, another strong SaaS player with a slightly different flavor (higher growth, higher losses) comes to market in the coming weeks.
Here's the data as of 3/20, with MULE trading at ~$23/share, compared to the initial range of $12-14 and final pricing of $17.