Sounds like a scary laboratory... actually just a really big software company. Once dubbed “the Facebook of programming,” GitLab is a one-stop shop for developers to create, store, and distribute new software. Instead of sending a “per my last email: code change” to your coworker, you can see and make all changes in one place.
- Shares of GitLab jumped 35% yesterday after going public on the Nasdaq. GitLab closed well above its IPO price of $77, giving it a $14B+ valuation, nearly double what it was in January.
- During the pandemic, GitLab benefited from companies rushing to streamline their operations remotely. It generated $152M in revenue in 2020 — up nearly double from 2019.
- Fun fact: San Francisco 49ers legend Joe Montana invested $100K in GitLab through his fund Liquid2 Ventures back in 2015, when GitLab’s valuation was just $12M.
Like a sibling rivalry… except there’s no relation. GitLab’s main rival, GitHub, has more than 65M developers and was scooped up by Microsoft in 2018 for $7.5B. GitLab has attracted new users by offering its popular DevOps software free. The hope was more nonpaying users would turn into premium paying subscribers, but it hasn’t panned out:
- <1%: how many of GitLab’s 30M users converted to a $19.99 or $99.99 a month subscription. For context: Spotify had a 46% conversion rate in 2019.
- $40M: GitLab's loss last quarter as a result of ramping up its marketing budget to attract big spenders.
Developers are the backbone of the hybrid work economy… but they need the tools to keep up with cloud demand. As more companies offer a flexible WFH lifestyle, it’s critical for businesses to make office apps available remotely. Companies like GitLab, whose employees are 100% remote, are gaining steam by trying to make that transition seamless. Still, it could be a while before they actually make money doing it.