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HashiCorp (HCP) launches IPO at $68-$72 to raise $1.1bn

By Kevin Donovan

15:25, 30 November 2021

Co-founders Mitchell Hashimoto and Armon Dadgar
Mitchell Hashimoto and Armon Dadgar founded HashiCorp in 2012 - Photo: HashiCorp

HashiCorp launched its planned initial offering of shares to the public at a $68 to $72 per share, raising up to $1.1bn for a $13bn valuation, the company announced Tuesday.

The cloud-based infrastructure software company is currently roadshowing its offering of 15.3 million shares and a price is expected later this week. The underwriting group will have the option to purchase up to 2.29 million shares within 30 days of closing, bringing the potential total to 17.6m shares sold for $1.26bn in proceeds, HashiCorp added in a release.

Goldman Sachs, JPMorgan Securities and Morgan Stanley are acting as joint-lead bookrunners, with BofA Securities and Citigroup as book-runners. Blaylock Van, Cowen, JMP Securities, KeyBank Nomura, Oppenheimer, Stiffel, R. Seelaus and William Blair are acting as co-managers.

No settlement date was disclosed. HashiCorp has applied to register its stock on the Nasdaq exchange under the ticker HCP.

What is HashiCorp?

Founded in 2012, San Francisco, California-based HashiCorp offers open-source software products managed remotely over cloud-based applications. Its main commercial product offerings are Terraform, Vault, Consul and Nomad.

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Losses but increasing revenue

HashiCorp reported $83.5m in losses, or $1.32 per share, on $211.9m in revenue for its 2021 fiscal year compared to a $53.4m loss for the full-year 2020 on $121.3m in revenue, according to the amended S-1 shelf registration filed with the US Securities and Exchange Commission. For the nine months ending 31 October, HashiCorp reported a $62.4m loss, or $0.94 per share, on $224.2m in revenue.

HashiCorp has 595 customers as of 31 October with $100,000 annual recurring revenue, up from 451 customers, in the year-over-year period.

VC equity holders

HashiCorp had been funded primarily by venture capital, having raised $349.2m over five funding rounds. HashiCorp most recently participated in a Series E funding round in March 2020 led by Franklin Templeton, raising $175m for a $5.10bn valuation.

The largest equity holders in HashiCorp are VC funds Mayfield, GGV Capital. Redpoint Omega, True Ventures and HashiCorp co-founder Mitchell Hashimoto, who owns 9.20% of the company’s equity.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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