News & Analysis

ZipRecruiter takes the tech route and heads onto NYSE today in $3 billion IPO

Andrew Saks, Wednesday, 26 May 2021

Online job marketplace ZipRecruiter has come a long way since its establishment in 2010 by Ian Siegel, Joe Edmonds, Ward Poulos and Will Redd in New York.

Rather than rest on its laurels as a simple web portal whose intellectual property is its database, ZipRecruiter took the very smart forward-thinking step of becoming a technology company which attracted huge attention from venture capital investors.

As the company started growing, it opened an R&D center in Israel and in 2018 ZipRecruiter claimed to have developed an artificial intelligence algorithm to increase the accuracy of job seeker/employer matches.

In 2017, Facebook also partnered with the company and integrated ZipRecruiter into its platform.

Today, ZipRecruiter takes its first steps as a publicly listed company, with its shares becoming available later in the day on New York Stock Exchange with an expected initial price of $18 per share.

The company is expected to raise $3 billion via this IPO, which is a significant amount considering that just 7 years ago it took its first round of private financing to the value of $63 million.

It was clear at the time that ZipRecruiter was onto something big, because it is very rare for a simple website with a database of users to be able to attract a round of funding so large, especially on its first attempt, however IVP, the venture capital firm which backed the company after it had bootstrapped itself for its first three years started a very big ball rolling.

As with most North American IPOs, it is likely that the initial stages will take place in the form of an auction, before pricing becomes available on derivatives platforms later this afternoon. ETX Capital will be offering the stock as soon as pricing is available for the wider market.

By using a direct listing for its public debut, ZipRecruiter is taking the same route as Coinbase (COIN), Roblox (RBLX), Airbnb (ABNB), Spotify Technology (SPOT) and others technology-orientated website-based companies, and whilst there are no underwriters, JPMorgan and Goldman Sachs were among the advisors.

ZipRecruiter recently reported a first-quarter revenue for this year of $125.4 million, up 11% from the year-ago quarter. It posted net income of $13.4 million, compared with the year-ago net loss of $11 million.

Despite the ongoing uncertainty of how the economy will recover from Covid-19, we remain optimistic that ZipRecruiter is in the early stages of a sustained economic recovery and our Q2 '21 guidance reflects robust sequential revenue growth, the company said in a letter to shareholders.

The ZipRecruiter IPO will list on the NYSE under the ticker ZIP, and its currently expected that shares will be available at a lower rate than initially anticipated, that being $18 rather than the $25 which was stated in April this year in the advent of the IPO.

A corporate statement today made it clear that "Given the strength of our balance sheet and cash flow generation over the past three quarters, we believe we have the capital we need to invest in our business as the economy reopens without raising additional equity."

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