Categories IPO, Technology

Bill.com’s (BILL) blockbuster debut breathes new life into IPO market

Bill.com's (BILL) blockbuster debut breathes new life into IPO market
Picture Courtesy: Bill.com

Bill.com (BILL: NYSE), a provider of business-to-business payment services, put up an impressive show on Thursday when its stock surged soon after debuting on the New York Stock Exchange. Trading under the ticker BILL, the stock closed its first session at $35.50, up over 60% from the above-range IPO price of $22.

The payment software startup offered 9.82 million shares to raise $216 million, which gives it a valuation of about $1.6 billion.

Also see: Visa revenues grow 13% in Q4

The Palo Alto, California-based company is the latest among a slew of startups seeking to go public, often eliciting significant investor interest. However, the IPO market witnessed uncertainties this year as some of the loss-making companies failed to live up to the market’s expectations. The fact that Bill.com had an upbeat Wall Street debut despite being a nonprofitable company is a testimony to the bright prospects of the sector it represents.

Price Raised

It needs to be noted that the price range was raised from the initial target of $16-$18. The company has been successful in demonstrating its prowess in AI-assisted payment technology. In the coming days, the market will be looking for updates on the management’s turnaround strategy, considering the firm’s not-so-impressive bottom-line performance in the past.

Related: PayPal jumps on upbeat Q3, expands in China

Bill.com provides cloud-based software that automates complex back-office financial operations for enterprises, with the support of artificial intelligence. It is led by founder and chief executive officer René Lacerte. On average, the firm processes around 45 million documents annually, facilitating transactions worth $70 billion. Around $2.4 million of bills are approved by customers every month.

Investors

Investors in Bill.com include some of the big names in Wall Street such as Microsoft (MSFT), Qualcomm (QCOM) and American Express (AXP). Earlier this year, the company entered into a partnership with Mastercard (MA) to offer virtual cards offering automated accounts payable solutions to small and midsize businesses.

Loss Widens

During the fiscal year ended June 30, 2019, the company generated revenues of $108.4 million, representing a 67% year-over-year increase. During that period, it incurred a loss of $7.30 million, slightly wider than the loss recorded last year.

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