Biometric authentication provider abandons private money for a possible IPO
Before the pandemic and the political turmoil of Jan. 6, most U.S. tech unicorns laughed at the thought of filing for an IPO. But digital identity management firm ForgeRock, a unicorn at least three times over, just approached the pool.
ForgeRock executives this week filed their Form S-1 registration, the first official step toward an anticipated offering of Class A common stock. They have not said when they expect FORG to begin trading or what its asking price will be.
Bloomberg says the software-and-service company could be valued at $3 billion to $4 billion. It cut its net loss from $36 million in the first half of 2020 to $20 million in the first half of this year. Over the same period, according to Bloomberg, revenue rose from $55 million to $85 million.
TechCrunch has noted that even if ForgeRock’s recent valuation is fizzy, it still towers over the $730 million the company was valued at after its last funding in 2020.
This is not the first time that company leaders, which recently added software-as-a-service to keep up with competitors, have talked publicly about an IPO.
After their series D, closed in 2017, according to TechCrunch, executives said it would be their last before going public. No doubt, that sounded like the dinner bell for some investors afraid of missing out on something.
Back in the day (up until 20 months ago), IPOs were for suckers. More money with fewer strings could be had by just hanging a “Money Wanted” sign on your building. It was easier to list organizations not throwing money at ideas.
There was so much money chasing targets that even the vaunted VCs on Silicon Valley’s Sand Hill Road found themselves just along for the ride, forced to patiently wait for their payouts.
Admittedly, an IPO is like the first hit of heroin. The immediate rush felt is a singular rush. But that rush is followed by a realization: Entrepreneurs do not manage that new money. The public money manages them quarter by quarter.
Some companies can manage that relationship — notably ForgeRock competitor Okta. Okta went public in 2017 (the same year ForgeRock flirted with the idea), and this spring was solid enough to buy cloud ID firm Auth0 for $6.5 billion.
Could ForgeRock be feinting again? Of course, but the economy is vastly different this time.
Maybe executives are dangling a lure before possible acquirers.
If Okta could finance the huge Auth0 deal, certainly someone out there might want one more buyout before things close down again.
Research pushed by ResearchandMarkets estimates that the global digital identity market will reach $49.5 billion in 2025, a compound annual growth rate of 16.2 percent from 2021 to 2026.
The report lists ForgeRock among the digital identity industry’s major players, alongside NEC, Samsung, Thales, Telus and Idemia.
Assuming ForgeRock is not angling here, it would seem to be a good candidate for the stock market, if the pandemic and politics can give things a rest.