In business, the term unicorn is used to describe a privately held startup company valued at over $1 billion.
As the name suggests, these types of startup companies are rare. They are usually high-growth companies that have big upside.
If unicorns decide to go public, they can offer great investment opportunities. Look no further than Amazon (NASDAQ: AMZN) and Alibaba (NYSE: BABA), which were both unicorns before they went public.
Most savvy investors pay close attention to unicorn lists in order to prepare themselves for future IPOs. After all, you don’t want to be the one who misses out on the next Amazon…
Some of the biggest unicorns today include companies like SpaceX (valued at $46 billion) and Epic Games ($17 billion).
But perhaps the unicorn with the biggest potential upside that nobody is talking about is a company called GitLab.
GitLab is headquartered in San Francisco and currently has over 1,200 employees.
GitLab runs GitLab.com, which is a web-based tool used to assist in the process of software development. It provides a one-stop-shop platform to plan, build, test and monitor software performance.
This process of software development and operation is commonly referred to as “DevOps.”
GitLab generates revenues by offering a freemium subscription service. The company’s free plan is mostly for individuals sharing open-source software, while its subscription offerings are for larger organizations.
GitLab is used by more than 100,000 organizations including IBM (NYSE: IBM), Sony (NASDAQ: SNE), Oracle (NYSE: ORCL), Alibaba (NYSE: BABA), and even NASA. This list is growing each and every day.
In 2019, GitLab was valued at $2.75 billion. As of January 2021, the company is valued at $6 billion, which is a $3.25 billion increase (+118%) in less than two years.
GitLab’s main competitor is a company called GitHub. Both companies provide similar services, but GitLab offers a more complete set of tools for developing software through a single interface.
Recently, GitHub was acquired by Microsoft for a jaw-dropping $7.5 billion. This has stirred up a lot of controversy within the GitHub community, so people are migrating to alternatives. This is where GitLab stands to benefit.
GitLab is a rising star. It’s popularity and community is growing. As a software junkie, I’ve used both platforms personally and professionally.
While GitHub has its uses, GitLab is a more complete platform that provides better overall support.
The next logical step for GitLab is to go public (IPO).
An IPO is something GitLab has never shied away from. The company co-founder and CEO, Sid Sijbrandij, sees the company going public soon when the time is right..
Sijbrandij believes that being a public company is an integral part of realizing their mission. This will only increase their brand awareness, access to capital, shareholder liquidity, autonomy, and transparency.
Currently, GitLab’s balance sheet is healthy. The firm’s most recent capital raise should give them plenty of runway to select the best time to go public.
GitLab’s product is continually improving. Their community of users is growing. And their finances are secure.
Keep an eye on GitLab for the next few months. When the time comes for them to IPO, be prepared to ride this unicorn into the sunset.
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