Chicago's Sprout Social Raises $150M in Efficient Mid-Range IPO
Sprout Social prices its initial public offering at $17 per share, raising nearly $150 million and achieving an approximate $814 million valuation. The social media software company demonstrates notable capital efficiency by reaching over $100 million in annual recurring revenue.
Chicago-based social media software company Sprout Social prices its initial public offering at $17 per share, landing directly in the middle of its proposed range. By selling 8.8 million shares, the company raises just under $150 million, achieving a market valuation of approximately $814 million. This successful debut provides a significant win for both its private investors and the growing Chicago tech ecosystem.
The public offering highlights remarkable capital efficiency, as Sprout Social builds over $100 million in annual recurring revenue using just slightly more than $110 million in total private funding. The company reaches this major revenue milestone between the second and third quarters of 2019, proving that it achieves scalable growth without relying on massive venture capital injections.
Trading at an approximate multiple of 7.75 times its trailing annual recurring revenue, Sprout Social provides a clear valuation benchmark for slower-growth software companies. The firm reports a healthy 30 percent growth rate during the first three quarters of 2019, illustrating the public market's current pricing expectations for enterprise SaaS businesses that expand steadily rather than explosively.