GitLab is considering going public after an employee share sale valued it at $6B; GitLab revenue crossed $150M annually after growing 74% in the latest quarter
Ari Levy / CNBC :
Context & Ripple Effects
GitLab's January deliberation caps a fast re-rating: the company let employees sell equity in a secondary share sale that valued it at over $6B, more than double the $2.7B mark from September 2019. The new datapoint is that revenue crossed $150M annually after 74% growth in the latest quarter — growth fast enough to make a public listing a live option rather than a distant one.
The consideration proved durable: by fall GitLab had filed for a US IPO targeting roughly $9B and up to $624M raised, then priced above range at $77 per share and closed its Nasdaq debut up 35% at a $14.9B market cap. This article is the hinge between the private secondary and the public offering.
First-order effects
- Employees holding GitLab equity get a liquidity path twice over — the $6B secondary sale first, then the IPO filing — while the 74% quarterly growth gives underwriters a headline metric to anchor the offering.
Second-order effects
- The $6B secondary price becomes the floor for IPO negotiations: the filing targeted ~$9B, a step-up justified by the $150M-plus revenue base, and the final $11B pricing validated the secondary as a leading indicator rather than a peak.
- Net losses widening to $40.2M from $9.4M a year earlier put pressure on the broader late-stage SaaS cohort to either show a credible path to profitability or accept the same discounted-loss scrutiny GitLab faced from public investors.
Third-order effects
- If the pattern holds, employee secondaries at stepped-up valuations become the standard on-ramp to tech IPOs — pre-pricing demand, de-risking the offering, and letting insiders sell into strength rather than waiting for lockup expiry.
- Public markets' willingness to absorb a loss-making, high-growth developer-tools company at a rising multiple signals that the 2021 window rewards growth over cash flow, shaping how the next generation of infrastructure software companies times their listings.
The trend: Late-stage software companies are using employee share sales as valuation benchmarks and liquidity valves on the way to IPOs, with public-market appetite for unprofitable growth setting the pace.