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From Unicorn to Unicorpse: Domo’s Valuation Slashed Ahead of IPO

Posted on Monday, Jun 25th 2018

Data analytics company Domo has recently filed to go public on the NASDAQ under the ticker DOMO. As a private company it had raised close to $700 million and was valued at over $2 billion, qualifying it as a Billion Dollar Unicorn. But its recent filing for the IPO now values it at $510 million. 

Domo’s Offerings

Utah-based Domo was founded in 2010 by Omniture co-founder Josh James. The idea for Domo came out of his frustration in accessing relevant business data from multiple sources. Today, Domo offers a unified intuitive platform that enables all employees to access real-time data and insights and take action from their smartphone. It simplifies business decision making by leveraging artificial intelligence, machine learning, correlations, alerts and indices.

Its multi-tenant architecture allows all users to have access to the same version at the same time on any device, with all updates and functionality deployed to its entire customer base. This enables organizations to use Domo for complex analytics processing that cannot be done in spreadsheets or traditional business intelligence, data discovery, data analytics, or data visualizations tools.

As of April 30, 2018, Domo had over 1,500 organizations as customers, including 385 enterprise customers with over $1 billion in revenue. Enterprise customers accounted for 46% revenue. As of January 31, 2018, approximately 1,500 of our users in the preceding 90 days were C-level executives, of which over 400 were CEOs.

It operates on a subscription-based model. Its basic model is available for free for a year and allows access to 5 users to analyze up to 5 million rows of data. After a year, the users have to choose from its menu of three pricing tiers ranging from $83 per user per month to $190 per user per month. The highest tier subscription comes with features such as the ability to analyze up to 2 billion rows of data, advanced governance and security, HIPAA Compliance capability, consulting from certified partners, and premium support.

Domo’s Financials

For the year ended January 31, 2018 , its revenue grew 46% to $108.5 million, net loss narrowed to $176.6 million from $183.1 million a year ago, and had negative cash flow from operations of $148.7 million. For the three months ended April 30, 2018 , its revenue grew 32% to $31.9 million and net loss narrowed to $45.5 million from $48 million. As of April 30, 2018, it had an accumulated deficit of $803.3 million and cash and cash equivalents of $71.9 million with no amounts available to draw under its credit facility.

Its quarterly subscription net revenue retention rate was 101%, 107%, 107%, 111% and 105% for each of the quarters during the fiscal year ended January 31, 2018 and the three months ended April 30, 2018, respectively.

Its competitors include large software companies such as Microsoft, Oracle, SAP, and IBM; business analytics software companies such as Tableau, Qlik, Looker, Sisense, and Tibco; and SaaS-based products or cloud-based analytics providers such as and Infor.

Domo was widely criticised following its initial filing early this month which showed cases of self dealing with companies affiliated with Founder CEO James, including an aircraft leasing company, a local restaurant, and an interior design company. In an updated filing, the company says that it has now terminated these arrangements.

Domo had raised $690 million from investors including Andreessen Horowitz, Benchmark, Ben Horowitz, Bezos Expeditions, BlackRock, BYU Cougar Capital, Capital Group, Credit Suisse, Dan Rose, David Lee, Dragoneer Investment Group, Fidelity Investments, Founders Fund, Frank Wilder, GGV Capital, Glynn Capital Management, Greylock Partners, Hiroshi Mikitani, HWVP, Hummer Winblad Venture Partners, IVP, Jeff Bezos, Jeff Kearl, John Pestana, Lars Dalgaard, Marc Benioff, Mark Gorenberg, Mercato Partners, Meritech Capital Partners, Morgan Stanley, Paul Sagan, Pelion Venture Partners, Ronald Conway, Salesforce Ventures, SharesPost Investment Management, SV Angel, TPG Growth, Transmedia Capital, T. Rowe Price, Viking Venture Management, WPP, and Zetta Venture Partners. Its last round of funding was held in April 2017 when it raised $100 million at a valuation of $2.3 billion.

In 2015, Domo had reported bookings of $100 million with revenues doubling each year. You would assume that it would currently be trending at revenues of $400 million but the IPO filing is an eye opener. With revenues of $108.5 million, Domo was overvalued as a private company. It now plans to raise $189 million by offering 9.2 million shares at a price range of $19 to $22 a share, valuing it at about at a more realistic $510 million. The losses are staggering, and the amount of funding raised is also exorbitant. Its competitor Tableau reported revenues of $877 million in 2017 and is trading at a valuation of $8.5 billion.

This segment is a part in the series : From Unicorn to Unicorpse

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