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DigitalOcean IPO range has been set in the latest S1 filing. The cloud computing company aims to raise up to $775.5 million, increasing its value to $5 billion.
DigitalOcean IPO is scheduled in the coming days. The company is set to list on the New York Stock Exchange under the ticker DOCN. Its underwriters include JPMorgan, Morgan Stanley, and Goldman Sachs. In its latest S1 filing, it has been revealed that the company is looking to raise around $775.5 million. This would see its value rise to $5 billion, a fraction of its competitors like Amazon, Alibaba, Google and Microsoft. Admittedly, of its competitors, DigitalOcean is the only company that only offers cloud services and no other business.
Additionally, the company revealed that it is offering 16.5 million shares and expects to sell them for $44 to $47 per share. And buyers are already lining up. Upon DigitalOcean IPO, Tiger Global and Access Industries are set to buy $175 million worth of shares. If the company can raise the proposed amount and at that price per share, it will be set for a market cap of around $5 billion.
However, despite attracting Venture Capital company’s such as Andreessen Horowitz early on when its shares were just $2, its performance has been lacking. In 2020, DigitalOcean made a loss of just under $44 million. Notably, this was an increase from a total loss of $40 million in 2019. in terms of revenue, the company only recorded $318.4 million in 2020. In comparison, market leaders AWS brought in $45.37 billion. Despite the huge financial gap, DigitalOcean believes it has an edge that will keep them in the race. Unlike AWS which targets big businesses and companies, DigitalOcean is after the small business.
DigitalOcean Target Small Business
Although DigitalOcean is lagging behind in numbers, the company has stuck to its principles since its launch in 2012. One of these is simplicity. Unlike AWS which has an array of products, DigitalOcean maintains a limited number of products. The company believes that clients find it hard to choose from a complex variety especially for startups and small business which have been their main business. It notes that big companies offer highly complex products and features, and with them comes opaque pricing and bills that often carry hidden charges.
The company wrote:
“Companies frequently need dedicated employees, pricing analytics tools or even specialized consultants to understand how products are priced and how to manage their bills.”
Finally, DigitalOcean has revealed that it wants to specialize in small to medium companies. Remarkably, around 14 million small to medium businesses are created every year. Furthermore, plans to expand its global reach having already tapped into India, Africa and North America. The company believes that these clients can leverage their simple and reliable development tools to get started with cloud computing.