10 Key Things to Know About Today's Hot IPO for Twilio (TWLO)

Below are 10 key things to know about today’s hot IPO for Twilio (NYSE: TWLO)

1. Shares opened up 60% to $23.99 after pricing 10,000,000 shares at $15, which was above the $12-$14 range initially expected. The underwriters have the option to purchase up to an additional 1,500,000 shares from Twilio at the initial public offering price less the underwriting discount. Shares are currently up 69% to $25.35, already making it a Top 5 performing IPOs for 2016.
2. 82,200,793 class A and Class B shares are expected to be outstanding following the offering, giving the company a market cap of $2.1 billion based on the current share price of $25.35.
3. The company’s Programmable Communications Cloud software enables developers to embed voice, messaging, video and authentication capabilities into their applications via a simple-to-use Application Programming Interfaces, or API.
4. Cloud platforms are a new category of software that enable developers to build and manage applications without the complexity of creating and maintaining the underlying infrastructure. Gartner predicts that by 2020, 75% of application purchases supporting digital business will be "build, not buy."
5. The company's platform currently addresses significant portions of several large markets that, in aggregate, have been estimated by IDC to be $45.6 billion in 2017.
6. The company had 28,648 Active Customer Accounts as of March 31, 2016, this is up from 19,340 at the same time last year. Some top customers include: American Red Cross, Box, HubSpot, Nordstrom, OpenTable, ServiceNow, Uber, Zendesk. In 2013, 2014 and 2015 and the three months ended March 31, 2016, WhatsApp accounted for 11%, 13%, 17% and 15% of revenue, respectively. WhatsApp uses Programmable Voice products and Programmable Messaging products in its applications to verify new and existing users on its service. Variable Customer Accounts, including WhatsApp, do not have long-term contracts with the company and may reduce or fully terminate their usage at any time without penalty or termination charges. In addition, the usage of products by WhatsApp and other Variable Customer Accounts may change significantly between periods.
7. The company has two classes of common stock, Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except voting and conversion rights. Each share of Class A common stock is entitled to one vote. Each share of Class B common stock is entitled to 10 votes and is convertible at any time into one share of Class A common stock. The holders of the outstanding Class B common stock will hold approximately 98.6% of the voting power of our outstanding capital stock following this offering, with directors, executive officers and significant stockholders holding approximately 66.2%.
8. The market in which the company participates is intensely competitive. Competitors fall into four primary categories: legacy on-premise vendors, such as Avaya and Cisco; regional network service providers that offer limited developer functionality on top of their own physical infrastructure; smaller software companies that compete with portions of our product line; and SaaS companies that offer prepackaged applications for a narrow set of use cases.
9. For the years ended December 31, 2013, 2014 and 2015 and the three months ended March 31, 2016, revenue was $49.9 million, $88.8 million, $166.9 million and $59.3 million, respectively. They incurred a net loss of $26.9 million, $26.8 million, $35.5 million and $6.5 million for the years ended December 31, 2013, 2014 and 2015 and the three months ended March 31, 2016, respectively.
10. The company was co-founded by Jeff Lawson (38), who served as Chief Executive Officer and as a member of our board of directors since April 2008 and has served as the Chairman of our board of directors since November 2015. From 2001 to 2008, Mr. Lawson served as founder and Chief Technology Officer of Nine Star, Inc., a multi-channel retailer of equipment and apparel to the action sports industry. From 2004 to 2005, Mr. Lawson served as Technical Product Manager of Amazon.com, Inc., an electronic commerce and cloud computing company. In 2000, Mr. Lawson served as Chief Technology Officer of StubHub, Inc., an online marketplace for live entertainment events. From 1998 to 2000, Mr. Lawson served in several roles at Versity.com, Inc., a website for college lecture notes, including as founder, Chief Executive Officer and Chief Technology Officer. Mr. Lawson holds a B.S. in Computer Science and Film/Video from the University of Michigan.

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