GitLab IPO: Everything you need to know about GitLab

GitLab is a service that helps developers share and manage code. Here’s the lowdown on the company's and its strategy following the GitLab IPO.

GitLab IPO: What do we know about the GitLab IPO?

The GitLab IPO launched on Nasdaq on October 14 2021. The company raised around $650 million with shares initially priced at $77, valuing the company at some $11 billion.

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How much is GitLab worth?

GitLab is worth more than $11 billion as of October 14 2021, based on its IPO pricing. Prior to this, the company was valued at around $6 billion at the point of its secondary share sale in November 2020. Earlier still, September 2019 saw the company achieve a valuation of $2.7 billion following a Series E round of $268 million.

What is GitLab?

GitLab is a San Francisco-based collaboration website that allows programmers to share and manage code. It uses ‘Git’ software, which tracks changes in files, to enable multiple developers in a project to work simultaneously on component tasks for maximised workflow efficiency. 

The idea for the company emerged in 2011 when Ukrainian programmer Dmitriy Zaporozhets identified a lack of communication tools in the market for developers. After building the initial open source product, he decided to work on the project full time, partnering with co-founder Sid Sijbrandij and officially launching the company in 2014. Soon after, the team moved to San Francisco and made a successful application to the Y Combinator seed fund program, graduating in 2015 with cash and a headcount of nine.

The program’s success allowed GitLab to raise a further seed round of $1.7 million led by Khosla Ventures and, by the September 2015 Series A of $4.5 million, the company had acquired some 100,000 users.

Subsequent $20 million rounds in 2016 and 2017, and a $100 million round in 2018, helped GitLab further develop its products and improve global reach. But by far the largest raise came with the $268 million Series E round in 2019, which funded a push to make the company’s DevOps platform offerings, including monitoring, security, and planning, best in class.

The company achieved revenues of $150 million for 2020, up from some $81 million for the previous period. GitLab has almost 1,500 employees as of October 2021.

Who are GitLab’s competitors?

GitLab’s closest competitor is rival web-based Git repository GitHub, which was acquired by Microsoft in 2020 for $7.5 billion. While both services share the use of the open-source Git platform, there are some key differences. For example, GitLab focuses more on continuous integration (CI), which facilitates the management of code without a reliance on manual updates or integrations. On the other hand, GitHub requires third-party tools to enable CI.

There are various other competitors that operate in the Git repository space, such as Atlassian, Bitbucket and Google’s Cloud Source Repositories.

How does GitLab make money?

GitLab makes money through paid plans and subscription add-ons. While the freemium product allows users to access a complete DevOps platform, more functionality can be achieved by purchasing the Premium package at $19 per user per month, or the Ultimate package at $99 per user per month.

The Premium deal provides code integrity controls, productivity data, and project management on top of the basic package, while the Ultimate package secures users advanced security testing, compliance, and portfolio management, as well as additional perks such as free guest users.

Subscription add-ons come in the form of additional CI minutes at $10 per 1,000 minutes.

What is GitLab's business strategy?

GitLab’s business strategy from the start was centred around facilitating the contribution process to projects for developers. The company set out a 30-year goal to become the most-used collaboration tool for knowledge workers in any industry.

GitLab has made a series of strategic acquisitions over the past six years that give useful insight into its intentions at various points. It acquired open source web application Gitorious in 2015 in a bid to strengthen the development of GitLab’s open source Git management application. In 2018, GitLab turned its attention to security with the purchase of Gemnasium, a service which alerts developers to open source threats.

This drive to improve security was bolstered with the acquisition of software security testing companies Peach Tech and Fuzzit, services that use a specific technique of ‘fuzz testing’ to find bugs and vulnerabilities ‘before the bad guys do’.

More recently, GitLab acquired machine learning tool UnReview as part of a plan to use machine learning processes to help automate the selection of code reviewers.

GitLab also has in place strategic partnerships with the likes of Google and Amazon Web Services, where GitLab has a marketplace presence.

In its dividend policy, GitLab revealed its intention to retain all available funds and any future earnings for use in the operation of the business, specifying it does not anticipate paying any dividends on its capital stock in the foreseeable future. Any future determination to declare dividends will be made at the discretion of the board of directors.

Is GitLab profitable?

Gitlab is not currently profitable, as it reportedly suffered a net loss of $192 million in 2020 despite gross margins hovering consistently around 88%. The rate of loss did slow however in 2021, with the company showing a loss of $69 million for the first half of 2021.

Who owns GitLab?

The ownership of GitLab is split between a range of individuals, such as the co-founders Sijbranij and Zaporozhets, as well as financial institutions with equity stakes such as Meros Equity Global Management, ICONIQ Capital and GS Growth.

Board of directors of GitLab

Sytse (‘Sid’)Sijbrandij – Co-founder, Chief Executive Officer

Brian Robins – Chief Financial Officer

Michael McBride – Chief Revenue Officer

Todd Barr – Chief Marketing Officer

Eric Johnson – Chief Technology Officer

Robin J. Schulman – Chief Legal Officer

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