1 The stock to watch: CHWY (though we wish it was WOOF)
Chewy is set to begin trading among the public company big dogs on Friday, but investors are already lapping it up.
IPO shares of Chewy, the largest US online retailer of pet food and supplies being spun out of PetSmart, were priced at $22, above the expected range. About 46.5 million Chewy shares were sold in the IPO, raising about $1 billion and valuing Chewy at about $8.8 billion. (PetSmart will continue to be the majority shareholder.)
The fast-growing homegrown success story that is Chewy, based in Dania Beach, was founded in 2011 by Ryan Cohen and Michael Day. The startup quickly differentiated itself by superior customer service, including with touches such hand-written holiday cards and personal pet portraits, and became the No. 1 online pet products retailer. Today, it has more than 10,000 employees.
Chewy booked $3.5 billion in sales in 2018, up from $2.1 billion in 2017, but has yet to be profitable. It plans to trade on the New York Stock Exchange under the symbol CHWY (though we do wish it was WOOF).
Cohen, CEO of Chewy until stepping down last year, told TechCrunch this week that the IPO “feels like my baby is graduating from the college that I never went to.” As for himself and what’s next, Cohen he is evaluating opportunities now. South Florida’s entrepreneurial community will be pleased he said: “I have no plans to sit in retirement, that’s for sure. I’m 33 and I’m competitive and I like consumer businesses and I like to win.” Check out the terrific TechCrunch Q&A with Ryan, exploring the past, present and future, here.
To be sure, Chewy will have a tough act to follow. Tel Aviv-based freelance services marketplace Fiverr surged in its NYSE debut on Thursday. Priced at $21 per share, shares closed at $39.90, nearly doubling.
This is shaping up to be the year of the IPO for tech startups. Will investors take a liking to Chewy when CHWY shares begin trading today? Woof woof.
UPDATE: Chewy surged in its first day of trading on the big board. CHWY shares closed at $34.99, up 59%. Read all about it in the Sun Sentinel here.
2 #FloridaTech: KnowBe4 raises mega-bucks and another unicorn is born
KnowBe4, a cybersecurity training company in the Tampa Bay area, announced it has raised $300 million in an investment round led by private equity giant KKR.
And with that, another Florida unicorn is born. KnowBe4 has reached a valuation of $1 billion.
Founded in 2010, KnowBe4 helps companies reduce their cyber risk by training workers to respond to threats. It has 740 employees, serves a customer base of more than 25,000 companies and organizations, and books $100 million of recurring revenue.
“Threats like phishing, ransomware and other forms of social engineering continue to plague organizations of all sizes, meaning the market for our security awareness training is growing at a rapid pace,” Stu Sjouwerman, KnowBe4’s CEO and founder, said in a news release. “The relationship we started with KKR earlier this year has been fruitful for both of us.”
KnowBe4 will use the funding to continue its global expansion (it already has several overseas offices) in and to further develop its platform.
“Cyber threats are not going to be solved with technology alone; the human side of the equation matters and KnowBe4 is making important contributions in this area,” said Patrick Devine, a principal at KKR. “We’re very excited to watch the company continue to scale globally and meet market demand for security awareness training and testing that actually works.”
Read more in the Tampa Bay Times here.
3. South Florida’s most famous unicorn teams up with CNN
Magic Leap and CNN announced this week they have expanded the capabilities of the CNN app on Magic Leap One, introducing interactive mixed media spatial storytelling, expanding the power to “go there” and bring stories to life in new ways. For example, in its first one, CNN is diving into the Thai cave rescue by combining a collection of CNN news coverage with interactive explainer elements, helping users users understand first-hand how and why the kids became trapped and the challenges surrounding their rescue by allowing users to explore the cave and see animation of the rescue process.
4. Longtime Ultimate CEO and founder names Co-CEO
Adam Rogers, Ultimate Software’s chief technology officer, has been named co-CEO of the Weston-based HR-tech giant, the company announced this week. Rogers joined Ultimate Software in 1997 and will lead the company along with founder Scott Scherr.
“Adam has been my trusted partner in leading Ultimate and developing our product and technology strategies for more than 20 years. I’m thrilled to welcome him as co-CEO,” said Scherr in a news release. “Adam brings extraordinary leadership experience and operational expertise to the next phase of our partnership journey together.”
Ultimate, one of South Florida’s largest tech companies, also announced Wednesday that it has promoted Julie Dodd to chief operating officer. Dodd has been Ultimate’s chief services officer since 2013, overseeing customer support.
Ultimate Software, which employs 5,100 with a third of them based in Weston, went private in April through an $11 billion sale to San Francisco-based Hellman & Friedman. Together, Ultimate Software’s top execs earned $102 million as result of a buyout, according a company SEC filing.
5 A small business gets a big spotlight
Life’s Abundance, headquartered in Palm Beach County, has been named to Forbes Small Giants: Best Small Companies list of 2019. The wellness brand is one of 25 privately held businesses that stand out for “valuing greatness over growth” by providing high-quality products and services, fulfilling employment opportunities and driving impactful social outreach.
In 1999, Life’s Abundance began producing premium healthy pet food, gaining a reputation as the brand that has never once been recalled. The company has since branched out to reach those pets’ humans with skin care products, nutritional supplements and eco-friendly cleaners, as well as adding treats and supplements for companion animals.
“We are deeply honored to be a part of the Small Giants Community, an inspiring group of purpose-driven business leaders,” says Lester Thornhill, CEO of Life’s Abundance, which makes products to improve the health of people, pets and the planet. “This award holds particular meaning to us because it celebrates our commitment to making an impact beyond our balance sheet, whether it’s creating products for the well-being of you and your pets, selecting sustainable business practices, or contributing to charitable organizations.”
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