Bill.com Takes Off in Initial Public Offering

The company’s shares soar 61% in its first day of trading on the New York Stock Exchange. 

Bill.com went public on the New York Stock Exchange today, and the results were impressive. The fintech company’s stock jumped more than 60% during its market debut. 

The company’s IPO price was $22 per share, but Bill.com ended the day trading at $35.50 per share. Here is an overview of the company’s public offering, and what’s next for Bill.com.

An overview of Bill.com’s IPO

Bill.com provides AI-based financial software that makes it easier for small to medium-sized companies to manage their back office. Roughly 55% of the company’s revenue comes from software subscription fees. The rest comes from transaction fees and interest.

The company currently has 81,000 customers that use its services, but it believes its potential reach is much larger than that. In its prospectus, management stated that it believes it has a $30 billion total addressable market.  

In the weeks leading up to the IPO, there were signs that the company believed it would go well. First, Bill.com increased its IPO range from $16 to $18 per share up to $22 per share. The company also released an additional million shares. 

In total, the company sold 9.82 million shares and raised $216 million. The public offering was led by Goldman Sachs, Jeffries, KeyBanc Capital Markets, and Bank of America. 

Bottom Line

2019 hasn’t been a great year for IPOs. Both Uber and Lyft had highly anticipated public offerings, which were mostly a letdown. WeWork’s IPO fell apart at the last minute, and the stationary bike maker Peloton had one of the worst IPOs of the year. 

And like many companies going public this year, Bill.com is not yet profitable. During its last fiscal year, the company lost 13 cents per share. But there are still many reasons to be hopeful about Bill.com. 

Bill.com is growing quickly, and its revenue increased by 67% over the past year. And the company’s large customer based proves it’s done a good job of carving out a niche for itself in the B2B finance market. It remains to be seen whether the company can continue to build on this momentum and become profitable. 

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