As SendGrid preps for public debut, the IPO market appears receptive


For eight years, SendGrid focused on one of the most mundane technologies this decade: sending email. Password resets? Yep. Uber receipts? Check. New salaries on Glassdoor? Since 2012.

But figuring out which messages are important to users and making sure they get delivered has paid off big time for the Denver company. SendGrid is now a multimillion dollar business that is poised to hit it even bigger Wednesday when it makes its debut on the New York Stock Exchange. And while the public market has offered a lackluster reception for a few tech firms this year, some industry analysts feel SendGrid has what it takes.

“It’s a good time for a tech company to go public,” said Kathleen Smith, co-founder of Renaissance Capital. “The really important thing is investors are looking for growth, which is what you have with SendGrid. They (investors) don’t want to see growth at all costs. They want to see the bottom line, cash flow. That’s what these guys have here.”

SendGrid also is one of the rare Colorado tech companies to make it to the initial public offering stage in years. And as a company that started with three developers in 2009, SendGrid, now with 408 employees, embraced the Denver community and has a number of supporters cheering it on.

“Oh, yeah, this is really exciting,” said Andrea Young, CEO of the Colorado Technology Association. “They’ve worked so hard, they’ve done so much and they give back to the community. And they’re well thought of. I think their success will lead to other tech successes and will go far.”

IPO: April 12, 2013, $14 per share
Boulder-based software developer acquired in 2015 by CA Technologies for $19.50 per share, or about $480 million; Rally’s shares had closed at $13.51 the day before the acquisition became public.

SendGrid, currently in its quiet period, was unable to comment.

“Love that company,” gushed Erik Mitisek, an entrepreneur and the state’s chief innovation officer. “What an amazing grassroots story starting from Boulder and moving and growing in Denver and now to its IPO. It shows how a company can scale in Colorado.”

But growing to a billion dollar business or IPO has been an elusive quest for Colorado tech companies. Only two have made it to an IPO in the past three years. Cable and internet provider WideOpenWest Inc., based in the Denver Tech Center, raised about $310 million during its March IPO. Zayo Group, a Boulder telecom that runs internet fiber to office buildings, went public in 2014, raising $400 million on the first day.

Some became public after getting acquired. After the parent of Golden-based HomeAdvisor acquired Angie’s List in October, the companies were spun off as publicly traded ANGI Homeservices. Biopharmaceutical company Miragen Therapeutics went public in February after a reverse merger with Signal Genetics and taking the Carlsbad, Calif.-based company’s spot on Nasdaq.

And others — including some that had an IPO — have gone private. Denver cybersecurity firm Optiv Security filed to go public last fall but then switched direction and sold itself to a private equity firm in February. Earlier this month, one of Colorado’s largest public companies, Level 3 Communications, was acquired by CenturyLink for $30 billion. Boulder’s Rally Software, which went public in 2013, was acquired by CA Technologies two years later.

“Fifteen to 20 years ago, it was IPO or nothing,” said Rob Ward, a PwC partner who tracks venture capital in Colorado. “If you look at the M&A (mergers and acquisitions) activity in the last three to five years, large companies are exiting via acquisition.”

Tech companies in Colorado have been doing well, with Colorado ranked among the nation’s top 10 to 15 states for deals and dollars in recent quarters. But the IPO market has been soft in recent years.

“We’re obviously not in the hot IPO days of the late 1990s. It’s really been tepid,” said Ward.