Israeli Monday.com’s $6b IPO shows that remote collaboration market is thriving

The COVID-19 pandemic arrived more than a year ago, but the remote collaboration revolution is showing little signs of slowing down. This favorable climate has led to the arrival of Monday.com’s IPO, which has the potential to achieve a valuation of $6 billion. 

As the pandemic initially began to disrupt business, many companies adapted to the changes by temporarily closing offices and canceling work-related events and travel. Fast forward 12 months and there is clear evidence of digital transformation taking place as businesses seek to utilize tools to continue to thrive in this new climate. 

Although larger, more resourceful businesses may have made more of a seamless transition towards facilitating remote work and collaboration, other small and medium-sized businesses were severely impacted by the pandemic. However, the rise to prominence of cost-effective tools designed to help facilitate productivity while working from home (WFH) has been vital to the survival of smaller businesses that may have been less flexible at digital transformation. 

Collaboration software adoption rocketed in early 2020 as businesses attempted to avoid getting caught flat-footed by the disruption caused by COVID-19. As a result, platforms like Zoom, a video conferencing platform, experienced exponential growth. 

As a Nasdaq-listed company, Zoom performed exceptionally well off the back of the rise in remote work. Now, Monday appears set to follow in the footsteps of other collaboration platforms that have enjoyed exceptional success over the past 12 months in going public. But what can we expect from the listing? And is the remote collaboration boom here to stay? 

Assessing Monday’s IPO Filing

After prolonged speculation, Monday has confirmed its intentions to go public in the US. The company, which sells corporate productivity and communications software has enjoyed a profitable 2020 and is looking to build on the favorable climate surrounding WFH productivity tools by launching an IPO. 

Monday, which will arrive on the Nasdaq under the ticker MNDY, is aiming to achieve a company valuation of $6.12 billion. The company confirmed that it’s set to offer 3.7 million shares in the IPO itself, with the expected pricing range to fall between $125 and $140 a piece — raising up to $518 million in the process. 

Furthermore, the company is expected to have 43.7 million ordinary shares outstanding following the initial public offering, and the likes of Goldman Sachs, JP Morgan and Allen & Co have been drafted in as the lead underwriters. 

Monday recorded net losses of $152.2 million on revenue of $161.1 million across 2020, an impressive turnaround on 2019’s loss of $91.6 million on revenue of $78.1 million. This recent financial data indicates that the company is going public at a time where its growth is indicating that the company may be ready to grow whilst retaining its profitability. 

Although the IPO itself is largely limited to institutional investors, many online brokerages have opened the door for retail investors to apply and participate in Monday’s listing before it goes public. 

Maxim Manturov, Head of Investment Research at Freedom Finance Europe, says that: “Historically, institutional investors get around 90% of all shares, with only around 10% left for retail trades. This is where allocation comes from: when the demand is high, the broker will have to reduce order amounts so as to at least partially fill all of them. The allocation ratio, meanwhile, depends on the investor trading activity and volume.”

Further Prosperity Ahead For Remote Collaboration Tools

As we continue to transition away from the health crisis and towards the era of the ‘new normal,’ more companies are gearing up their operations to accommodate shifting work patterns. 

According to research from Dynabook Europe, the pandemic has facilitated significant growth in terms of IT spend among companies. In a survey sample of over 1,000 senior IT decision-makers at medium-to-large enterprises across Europe found that 67% of employees were expected to work either from home or from no fixed location in the wake of the pandemic – an increase from the 52% reported prior to the COVID-19 pandemic. This has led to 65% of European IT decision-makers now having access to increased IT budgets today, as a means of accommodating more widespread remote and hybrid working – as well as supporting the continuity of the business itself. 

Cloud-based collaboration platforms have performed exceptionally well. With all regions across Europe that were surveyed, Spain showed that 71% of organizations have boosted their tech investments for the near future alongside 70% of organizations from the Netherlands. As much as 76% of financial services organizations have revealed increased budgets, along with 73% of manufacturing businesses. 

With this data showing that businesses are largely looking to invest in remote collaboration tools, it seems clear that the WFH boom will only continue to pick up momentum following on from the pandemic. 

The fact that the remote collaboration market is only getting started should be cause for excitement for Monday stakeholders and investors alike. The upcoming IPO will go some way in determining the level of confidence the market has in supporting a more remote future.