
Mulesoft files for IPO - knes
https://www.sec.gov/Archives/edgar/data/1374684/000119312517047884/d287291ds1.htm
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calcsam
Some notes from the S-1:

* "Subscription and support" revenue is about $150M, with "professional services" about $30M. This is a software company with a services side, not the other way around. That's good as software companies tend to be valued around ~10x revenue and services companies only around 3x revenue.

* The company made $180M revenue in 2016, growing at ~70% / year, so it's probably on a ~$250M run rate right now.

* Last round of funding was raised at a $1.5B valuation. I imagine they'll try for 10-12x revenue, or $1.8B - $2.2B. Twilio is currently trading at around ~10x revenue.

* Sales & marketing spend is very heavy -- $122M of their $240M expenses, so about half, were due to sales and marketing. Engineering aka "research and development" only costs them 1/4 of that, or $30M / year. That's...okay I guess? It means growth is pretty expensive, but if they ever want to dial back that growth, they can rake in the $.

* Ownership: Big VCs own 68% of the firm, the original founder owns 6%, the current CEO owns 3%, other execs own another couple percent. Ownership of the other ~20% isn't clear, prob split between smaller VCs and employees.

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pbreit
How about a description of what the company does that a mere mortal could
understand?

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huddo121
Their main product is an Enterprise Service Bus, a piece of technology that is
supposed to help make it easy for software developers to integrate with
multiple disparate third party solutions (and potentially internal solutions).
So you can get a "Connector" for SAP, and another for Salesforce and
consolidate, transfer or do practically whatever with the data in both
systems, without having a bunch of developers working on an in-house solution
to consume the requisite APIs.

My one criticism of them would be they focus very heavily on cloud, and their
on-premises offering is woefully anaemic, lacking fundamental functionality,
such as messaging.

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emmelaich
I'd say their support for on-promises deployments is anaemic too.

For an open source product in the same niche, have a look at
[http://servicemix.apache.org/](http://servicemix.apache.org/) which includes
[http://camel.apache.org/](http://camel.apache.org/) and other bits.

~~~
phonon
I would also look at [https://zato.io/](https://zato.io/) which is a really
nice Python based one.

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nodesocket
I applaud Mulesoft for going public. Too often today large (well past series
C) tech companies (I won't name any names) refuse to go public and instead
continue to take private equity and foreign investment and prop themselves up
on absurd valuations with no-checks and balances. Some of these companies are
absolute dog shit, yet they continue to receive unlimited funding and insane
valuations in a vacuum with no market to short them.

Wall Street calls bullshit when they see it, and smart people short bad
companies when they find them. Silicon Valley doesn't provide a way to short
these propped-up companies, they just continue to self-promote themselves on
private equity and foreign investment.

Kudos Mulesoft and best of luck.

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hkmurakami
There are rumors of Dodd-Frank getting repealed [1].

Afaik Dodd Frank had increased the reporting burden of companies to the point
where it was much more difficult to IPO at a .com era revenue stage. So maybe
its repeal will have the side benefit of allowing young but operationally
strong companies to use IPO as a viable fundraising avenue again.

[1] though the Wall Street implications worry me.

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nsp
I thought Sarbanes-Oxley, which added a lot of reporting/disclosure
requirements for public companies and was passed in the wake of Enron and
Worldcom scandals in the early 2000s was the primary driver behind the drop in
IPOs? What provisions in Dodd frank are there that effect this?

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hkmurakami
Whoops I think I got them confused!!! :(

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astrodust
Why have I confused Mulesoft with Nullsoft all these years?

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khazhou
Because they're both single-vowel words followed by "soft."

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astrodust
Possibly, but also because "Mule" and Nullsoft's llama, plus things like EMule
and WinAmp pairing so well.

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khazhou
MULESOFT. It kick's the llama's ass.

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openmosix
Love it. Mulesoft was a customer at my previous company and I always enjoyed
working with them. Good luck for their IPO - it's a good thing for the
ecosystem to see more tech companies going public this year.

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econner
What exactly does Mulesoft do?

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tyingq
The old terminology was ESB, or enterprise service bus. It's Java based, and
basically feels something like Tomcat, but with a bunch of add ons. Things
like api management, various protocol connectors, data translation, pre-built
integrations, and so forth. Like a hub that can run your code, plus talk to
most of what you already have.

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msoad
If it's anything like Apigee IPO it would be a huge disappointment for their
employees

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ultimoo
What went wrong with the Apigee IPO for the employees? I know that they got
acquired by Google but I'm not familiar with anything else.

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econner
Quick research suggests this timeline to me:

Summer 2014 Apigee raises last private funding at a $600M valuation

April 2015 Apigee IPOs at a valuation of $500M

By end of 2015 Apigee closes at a valuation of ~$250M.

So the company lost almost 2/3rds of its value probably right as the lockup
period was expiring for employees to sell shares.

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bogomipz
Ouch. What is the justification for the lock up period? Is the idea that
employees are somehow going to flood the market? Is the volume of vested
options for the average worker bee really that high at the time of IPOs? Its
seems like the plebes get burned a fair amount.

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econner
Yea, it's to keep the price somewhat stable after the IPO. It's a very
standard thing to do and the share price of a company usually drops
permanently when the lock up period expires.

Maybe a good rule of thumb is 10-20% of the company could be owned by
employees at the time of IPO which could materially change the share price.

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mvip
Winamp goes public!

