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What does Purple Hat’s sale to IBM inform us about Couchbase’s valuation?

The IPO rush of 2021 continued this week with a contemporary submitting from NoSQL supplier Couchbase. The corporate raised hundreds of millions whereas non-public, making its impending debut an vital second for plenty of non-public buyers, together with enterprise capitalists.

Based on PitchBook data, Couchbase was final valued at a post-money valuation of $580 million when it raised $105 million in Could 2020. The corporate — regardless of its expansive fundraising historical past — is just not a unicorn heading into its debut to the most effective of our information.

We’d prefer to uncover whether or not will probably be one when it costs and begins to commerce, so we dug into Couchbase’s enterprise mannequin and its monetary efficiency, hoping to raised perceive the corporate and its market comps.

The Couchbase S-1

The Couchbase S-1 filing particulars an organization that sells database tech. Extra particularly, Couchbase affords clients database expertise that features what NoSQL can provide (“schema flexibility,” within the firm’s phrasing), in addition to the flexibility to ask questions of their information with SQL queries.

Couchbase’s software program might be deployed on clouds, together with public clouds, in hybrid environments, and even on-prem setups. The corporate sells to giant corporations, attracting 541 clients by the tip of its fiscal 2021 that generated $107.8 million in annual recurring income, or ARR, by the shut of final yr.

Couchbase breaks its income into two primary buckets. The primary, subscription, contains software program license earnings and what the corporate calls “assist and different” revenues, which it defines as “post-contract assist,” or PCS, which is a package deal of choices, together with “assist, bug fixes and the precise to obtain unspecified software program updates and upgrades” for the size of the contract.

The corporate’s second income bucket is providers, which is self-explanatory and lower-margin than its subscription merchandise.