After a flurry of listings led by the technology and pharma sectors, the IPO market is cooling off as 2021 comes to an end. The latest among the companies looking to go public is Justworks, Inc., a provider of advanced human resources and payroll software.
The New York-based tech firm intends to list its stock on the Nasdaq stock exchange under the ticker symbol JW. However, the number of shares being offered and the offer price are not yet known. The group of book-runners will be led by Goldman Sachs, JP Morgan, and Bank of America Securities.
In the IPO prospectus submitted to the Securities and Exchange Commission, the company said its revenues increased 32.4% annually to $982.7 million in fiscal 2021. During the year, it generated a net profit of $10.9 million or $0.19 per share, compared to a loss of $20.3 million or $1.52 per share in fiscal 2020.
Justworks was founded in 2012 by Isaac Oates, who currently serves as the chief executive officer. The cloud-supported platform is designed to help enterprises, mainly small-and-medium-sized entities, effectively manage all activities related to payroll, human resources, and compliance. Its funding partners include investment firms Index Ventures and Bain Capital Ventures. The company had raised $50 million in cash early last year in a financing round.
Focus on SMBs
Justworks offers solutions that support all the employee-related activities of an organization, starting from the inception and operations of the business to future expansion. It is a one-stop shop for various HR tools, automated payroll, and compliance support, among others. The offerings help customers achieve economies of scale through co-employment and cost savings.
The company expects its annual addressable market size to be $40 billion. In order to tap into the unfolding opportunities, the management is pursuing a multi-pronged growth strategy. It includes the acquisition of newly formed and rapidly growing businesses as customers because the platform is designed to address the complexity of providing payroll and benefits services for emerging businesses.
The management plans continued investment in marketing initiatives and portfolio expansion to expand the SMB customer base. Also in the cards are strategic M&A deals suitable for delivering additional value to the target market through expanded product capabilities and service offerings. Last year, Justworks acquired Boomr, a provider of tracking solutions for workplaces.
Wall Street has witnessed some highly successful market debuts this year including those of Toast Inc., HashiCorp Inc., and Freshworks Inc.
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