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Construction tech firm Procore valued at $11 billion in solid market debut

By Reuters

By Niket Nishant

(Reuters) -Construction software firm Procore Technologies Inc was valued at nearly $11 billion in its market debut on Thursday, after its shares opened 25% above their initial public offering price.

The company’s shares opened at $84 each, compared with its IPO price of $67 apiece. In afternoon trading, they were marginally higher at $84.15.

The Santa Barbara, California-based company filed for its IPO last year, but delayed it due to choppy market conditions brought on by the pandemic.

Procore’s strong debut comes against the backdrop of more recent market struggles, this time due to inflation concerns and cryptocurrency price plunges.

Those worries prompted mortgage insurer Enact Holdings and hearing-aid services company to postpone their IPOs last week. Website-hosting service Squarespace, which went ahead with listing plans and debuted on Wednesday, saw its valuation slump by a third of what it was in March.

Procore, however, never considered postponing the debut, its founder and Chief Executive Officer Craig Courtemanche said.

“We saw the progress in our industry’s recovery quarter after quarter, and figured this was the right time to go ahead with our debut despite day-to-day fluctuations in the market,” Courtemanche added.

The company priced about 9.5 million shares for a raise of nearly $634.5 million. The $67 offer price was above the upper end of an earlier announced range between $60 and $65 each.

The nearly two-decade old company offers real-time access to project information, simplifying complex workflows, at a time construction firms have been saddled with higher costs and slower completion rates due to the pandemic.

Procore, whose cloud-based construction management software is used by over 1.6 million users in more than 125 countries, is backed by D1 Capital Partners and Tiger Global, among others.

Goldman Sachs, J.P. Morgan, Barclays and Jefferies are the lead underwriters for the offering.

(Reporting by Niket Nishant in Bengaluru; Editing by Ramakrishnan M. and Shounak Dasgupta)