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    $215 mln$249 mln

    IPO Datto Holding

    Platform for managed service providers
    IPO
    Medium risk

    Revenues in 1H 2019 - 1H 2020

    Invest in IPO Datto Holding

    This investment idea is no longer available. New applications are not accepted

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    Investment Idea Details
    The Company

    Datto is the leading provider of cloud-based software and technology solutions purpose-built for delivery through the managed service provider, or MSP, channel to small and medium businesses, or SMBs. It provides backup, recovery, and business continuity solutions to managed service providers worldwide. The company was founded in 2007 in Connecticut, US.

    A managed service provider (MSP) offers a computing framework platform for the organizations to remotely manage their customer's IT infrastructure. The MSP enables an organization to monitor servers, Exchange servers, firewalls, routers or switches, and Active Directory Servers from a centralized platform and location.

    Market Opportunity

    Datto platform enables MSP partners to manage and grow their businesses serving the SMB IT market. The SMB IT market itself represents a massive opportunity, with Gartner estimating global SMB IT spend in 2019 reaching $1.2 trillion and growing at a 4.6% compound annual growth rate, or CAGR, through 2023.

    According to Frost & Sullivan, there were approximately 125,000 MSPs globally and the MSP portion of the SMB IT market represented approximately $137 billion in 2019. This portion was estimated to grow at a 16.4% CAGR from 2019 to 2023, growing nearly four times as fast as the overall SMB IT market.

    Risks

    Datto faces intense competition in the market, especially from larger, well-established companies and vendors with an MSP focus, and it may lack sufficient financial or other resources to maintain or improve competitive position. Key competitors are Barracuda, StorageCraft, Acronis, Cisco, Ubiquiti and Veeam.

    Datto depends on growth in the SMB IT market, and lack of growth or contraction in this market could have a material adverse effect on sales and financial condition of the company.

    Financials

    Datto (MSP) plans to sell 22 million shares at a price range of $24 to $27. The company intends to raise as much as $600 million in an IPO of its common stock at about $4.3B valuation.

    The company booked $493M in revenue for the last 12 months ended June 30, 2020. Gross margin is around 71%. The company is growing moderately with revenue growth of 16% YoY. It is profitable and had a positive operating cash flow in 1H 2020. The firm demonstrates high dollar-based net retention of 115%.

    Similar public company is Ubiquiti (UI), which is trading at 9.8x sales with revenue growth of 10% and gross margin of 47%. Datto is asking investors to pay 8.7x sales with revenue growth of 16% and gross margin of 71%, which is a reasonable valuation. This investment idea has a medium potential return of up to 40%.

    How IPO Investments Work
    1. Collection of funds

    2-3 weeks before the start of the company publishes information about the opening of trading: financial statements for 3 years, a description of the company's business, plans for the future, as well as the risks that management sees in their own business. We analyze such offers and publish the best ones. Investors apply for deposits. Before the deadline for applications, you can change the request or cancel it.

    Publication
    16 Oct
    Threshold amount
    $50
    2. Buy shares

    We submit one large application for the purchase of shares by pre-subscription with reduced price to large investors. The application may be rejected in part or in full. Over the past three years, our applications have been rejected only three times. The next day, or every other day, we'll know at what price and at what percentage the order is executed, and we'll post it on «The my investment page».

    Submit applications before
    19 Oct
    3. Start Bidding

    The price of shares is rising from the first day due to the demand of investors deprived of the opportunity to buy shares before trading. Most of the stocks we've been recommending buying over the past three years have been starting to trade on the stock exchange at tens of percent higher than the price at which customers bought the shares. There comes a Lock up period when it is forbidden to sell shares purchased by subscription. Typically lasts 3 months.

    Start Bidding
    21 Oct
    Return forecast
    Medium (up to 40%)
    4. Receiving profit

    After the expiration of the Lock Up period, the investment is automatically closed and the investor receives a profit on account of the deduction commissions UT. You can always view the results of your past investments in investment archive.

    End
    25 Jan
    Early profit fixation

    Although no shares are allowed to be sold during the lock-up period, our traders seek to offer investors fixed profit by way of using various financial instruments, including forwards, options, short positions etc.

    From the investor’s point of view this means that he or she may close an investment by paying a certain part of its value (as a rule, approximately 15 percent). This is due to high prices for the instruments which are employed to ensure availability of fixed profit. As such, you shall press any relevant button in the Investor Account as soon as it is active.

    The closing procedure is similar to commencement of investment business. You shall file a bid which is executed within a business day by UT. So, your investment is closed at the price currently prevailing on the stock exchange. However, we rarely recommend using this feature, since upon expiry of an applicable lock-up period the average performance is higher.

    Fee

    FOR ENTRY

    3 per cent of the share price. This fee is charged as soon as your investment bid is confirmed.

    FOR EXIT

    1.75 per cent of the purchase price paid for your shares as soon as trading is closed. This fee is charged upon closure of any relevant investment.

    SUCCESS

    20 per cent of the profit your derive. This fee is charged only if you show positive performance as of the moment any relevant investment is closed.

    TO EARLY EXIT

    Usually, 15 per cent (depends on the stock exchange environment). It is calculated per each investment individually.

    Advantages Enjoyed by Those Investing with United Traders

    RELIABILITY

    Our risk managers ensure proper support throughout the entire transaction. Moreover, you may call them on +7 495 646-15-57 or 8 800 333-66-81 or visit our office, if a more detailed discussion is needed.

    IN THE PROFIT FROM THE FIRST DAY

    Such an approach allows it to limit extra risks related to bankruptcy of start-ups and considerably increase profit vs investors purchasing shares on open Market.

    LOW ENTRY THRESHOLD

    Millions of dollars are required to buy shares on a subscription basis. We have generated a pool of traders and investors which enables any newbie to participate in any transaction as aforesaid by investing just USD50 or more.

    Invest in IPO Datto Holding

    This investment idea is no longer available. New applications are not accepted

    View more ideas