SEMR Stock Listing - SEMrush IPO Discussion Thread

[secretagentdad]

https://www.sec.gov/Archives/edgar/data/1831840/000162828021003658/semrushforms-1.htm

To the moon or bust?
Anyone gonna buy?
Key item details below.

 

[Darth]

Funnily enough am just about to switch to Ahrefs. Their account/success managers whose sole job is just to sell you higher plans has always amused me.

 

[Philip J. Fry]

I'm optimistic about SEMRush's IPO. Unlike twitter or Amazon or other tech companies, where their stock valuation is based upon enthusiasm and the companies have yet to return a profit, SEMRush does return a profit, has a good gross margin (67%), and a solid customer base (67k customers). It's in 142 countries, which is a competitive advantage, as they have data on obscure countries, when I was shopping around last time. Want keyword data for Arabic in Morocco? SEMRush is the only one who has that data.

As far as their competitors, I think SEMRush has a big-box approach, where they offer many tools. I dislike their backlinks data and prefer Majestic. For their Keywords data, it's so-so but even KeywordSheeter is better IMO. It's good for agencies who want a one stop shop for a SaaS solution, which is their clientele IMO.

I predict that SEMRush would be the SEO and SEM SaaS that would be highly profitable similar to how SalesForce is super duper profitable. I'd put $1,000 in and let it sit for 10 or so years. The company is well managed, it has a competitive advantage, the economics are good, and, if you are an agency who trained your employees on SEMRush, you're not going to switch to another SaaS! It has loyal customers in the B2B market!

Go SEMRush!

 

[MrMedia]

They could increase their margins if they stopped retargeting the shit out of me with free trial offers even after I've signed up for the annual plan, paid in advance. Fools.

 

[Philip J. Fry]

https://seekingalpha.com/news/3668409-marketing-tools-firm-semrush-files-for-ipo

That infographic is inaccurate. They had a 7M net loss out of 125M revenue in 2020. They had a 10M net loss out of 92M in revenue in 2019. WTH are they spending all this money on when their gross margin is 67%?! What are they planning to do with the IPO money?! They plan on raising 100M from the IPO. Holy shit. They're going to have so much capital but... for what?!

I'm speculating that we can see a lot more tools from SEMRush in the future if this IPO happens. Hopefully better data too!

 

[Klayne]

As far as their competitors, I think SEMRush has a big-box approach, where they offer many tools. I dislike their backlinks data and prefer Majestic. For their Keywords data, it's so-so but even KeywordSheeter is better IMO. It's good for agencies who want a one stop shop for a SaaS solution, which is their clientele IMO.

Good points, but I believe aHrefs is gonna rape them.

The company is well managed

Did you see the shitstorm with their guest post service ?

 

[Philip J. Fry]

Good points, but I believe aHrefs is gonna rape them.

There's tacit consent since both agreed to enter the market.

Did you see the shitstorm with their guest post service ?

No. They offered a guest posting service?

 

[Klayne]

There's tacit consent since both agreed to enter the market.


No. They offered a guest posting service?

https://www.semrush.com/news/semrush-pauses-guest-posting-service/

It wasn't pretty.

 

[Philip J. Fry]

https://www.semrush.com/news/semrush-pauses-guest-posting-service/

It wasn't pretty.

Got it.

SEMRush is a mature company with a solid revenue stream. They're branching out with other product lines such as:

1. A content marketplace (https://www.semrush.com/marketplace/offers/article/)
2. A content marketing SaaS powered by AI (https://www.semrush.com/impacthero/)
3. An Angie's List for a B2B agencies (https://www.semrush.com/agencies/)
4. Amazon SaaS (https://www.sellerly.com/?utm_source=semrush&utm_medium=extratools)
5. PR SaaS (https://prowly.com/?utm_source=semrush&utm_medium=extratools)
6. And A/B testing SaaS (https://www.semrush.com/splitsignal/).

They could be revenue positive but are instead investing heavily into new product lines. They're seeking an IPO so that they can grow more and obtain more market share in new markets.

While the guest posting service did receive criticism, IMO it shows that the company is well managed. The managers are ambitious, industrious, and entrepreneurial. The influx of IPO money would make SEMRush very, very competitive compared to Ahrefs, Majestic and the other tools. In fact, the 100M in capital would make SEMRush outperform them quite easily.

... now... how do I get in on an IPO!

 

[secretagentdad]

Page 90 is the good stuff for people that like to read docs.

2100 average customer value is pretty darn good.

We don't bring in anywhere near that with keyword sheeter.

I wonder what serpwoo, moz and ahrefs are pulling in per user on average.

 

[Philip J. Fry]

Page 90 is the good stuff for people that like to read docs.

2100 average customer value is pretty darn good.

We don't bring in anywhere near that with keyword sheeter.

I wonder what serpwoo, moz and ahrefs are pulling in per user on average.

So, SEMRush's average customer lifetime is about 2 years, if the average customer subscribes to the Pro plan ($99/month). They must have less agency clients then I assumed... good to know.

 

[secretagentdad]

I wanna know what the usage rates are on the tools other than look keywords up by domain.
The amazon stuff especially seems like it would have way higher potential branded as its own thing.

Hope they put stuff about line item usage in the hype materials for investors later.
Really wanna see what people actually value in reality.

 

[bernard]

Jokes aside, I don't know, I don't use SEM Rush.

I use Ahrefs.

That doesn't mean SEM Rush won't do better than a hypothetical Ahref IPO, because SEM Rush has a nicer interface, much better SoMe presence (subscribe their Youtube), and they just have that sleek interface, that you could possible convince your boss to buy.

Overall, I am bullish on all companies in this niche going public. We're talking a business, parasitical as it is, has become multi-billion dollar big.

 

[Jarred]

Semrush will launch a search engine within 5 years of going public.

 

[miketpowell]

There are just some businesses that do not usually go public.

Porn and VPNs for example are both huge businesses with none of the large players being public. These businesses might do 100mm+ in revenue a year but they just have too much shady stuff going on as a standard practice to go public.

For SEMrush I really wonder how compliant all the scraping they do is.

Additionally, the true value I've always figured is not the raw profit you make in a business like that but the massive competitive advantage you get from knowing exactly what everyone is doing, what keywords they are tracking and working on, and all of that. Harder to profit off that in dubious ways if you are public.

No clue how the market will take it though I suck at predicting that stuff.

 

[secretagentdad]

Latest news on this.

Management Presentation
https://www.netroadshow.com/custom/IPO/SEMrush/

Amended registration statement
https://www.sec.gov/Archives/edgar/data/0001831840/000162828021004792/semrushforms-1a1.htm

Now looking for
$252 million by offering 16.8 million shares
Price of $14 to $16 per share.
Ticker to be SEMR
https://www.renaissancecapital.com/Profile/SEMR

Best seeking alpha breakdown I've seen so far.
https://seekingalpha.com/article/4414865-ipo-update-semrush-proposes-252-million-ipo-terms

 

[Jord]

Interesting decision from SEM Rush. Maybe it is a cash in whilst they can as to be honest I am seeing more innovation / new features from new up and coming SEO tools then the like of the so called big boys "Ahrefs, Sem & Moz".

 

[secretagentdad]

Looks like a growth play more than a cash in to me.

200 million builds a lot of new toys and allows for some hard core saturation marketing.


I’m pretty bullish on the industry in general. Around here we take it for granted, but being sophisticated enough to bother with keyword research is a pretty good signal that a business is above average at execution. Willingness to pay for an edge is a trait of business owners that succeed.

Companies that do keyword research and other organic marketing tasks out compete ones that don’t. With proper account management their customer pipeline is wide open to buying anything you can offer them that provides some kind of competitive edge.

The trick is finding ways to mass offer value and not turn into a line item expense.

We get to watch over the next several years and see if this management team can pull it off.

I think they’re going to do great. The customer base is well positioned. On top of that there is a ton of strategic value to the turf they’ve staked out that can manifest future tangible value in unpredictable ways.

Only issue they could have is if somebody gets some nasty patents that allow a sustained competitive advantage or google decides to abuse them.

I expect 30$ plus share price given a few years; pending no acts of god or google being abnormally abusive.
There’s a ton of strategic opportunity mixed with compound network effects.

They don’t even need to be number 1 in their current markets to get there. This niche is very pivot friendly. It inherently mass enables business models.

 

[miketpowell]

Looks like a growth play more than a cash in to me.

200 million builds a lot of new toys and allows for some hard core saturation marketing.


I’m pretty bullish on the industry in general. Around here we take it for granted, but being sophisticated enough to bother with keyword research is a pretty good signal that a business is above average at execution. Willingness to pay for an edge is a trait of business owners that succeed.

Companies that do keyword research and other organic marketing tasks out compete ones that don’t. With proper account management their customer pipeline is wide open to buying anything you can offer them that provides some kind of competitive edge.

The trick is finding ways to mass offer value and not turn into a line item expense.

We get to watch over the next several years and see if this management team can pull it off.

I think they’re going to do great. The customer base is well positioned. On top of that there is a ton of strategic value to the turf they’ve staked out that can manifest future tangible value in unpredictable ways.

Only issue they could have is if somebody gets some nasty patents that allow a sustained competitive advantage or google decides to abuse them.

I expect 30$ plus share price given a few years; pending no acts of god or google being abnormally abusive.
There’s a ton of strategic opportunity mixed with compound network effects.

They don’t even need to be number 1 in their current markets to get there. This niche is very pivot friendly. It inherently mass enables business models.

I agree I think overall this is just another part of the growing "big data" industry that businesses are using more and more to get ahead.

Frankly, one problem with SEO tools for large businesses is they are simply too cheap so they seem worthless. If it only costs $200/month how can it possibly help our billion-dollar business? Nah we want this special solution from these other guys for $20,000/month (exact same data)

In 2016 Facebook's "Audience Insight" tool gave away so much data information for free. I showed a friend that works at a large agency and they started putting together reports with that data and would sell it for 10k-50k to their clients. The clients would LOVE the data and often became a key part of making decisions for 10s of millions in ad budget for the year. He said if they had tried to give free reports with the same data those same clients would have never even read the report.

 

[Ryuzaki]

For those interested, Oleg Shchegolev (and on behalf of Dmitri Melnikov) have posted a Founder's Letter giving some insight into the reasons why, the numbers, and the future of Semrush.

 

[secretagentdad]

Bump. Well that's a disappointment. Stocks already tanking.
They opted to release at 14 and cut back to 10 million shares. (140 million)
There's an issuance option on 1.5 million shares at 14. (another 21 mill potentially)
They closed at 11.22$
Volume at close on 1st day of trading volume of 5,848,59
Appears to be popping up a bit in after hours.

Offering target close date is Monday the 29th

https://www.renaissancecapital.com/...latform-SEMrush-Holdings-prices-downsized-IPO

https://www.businesswire.com/news/h...-Announces-Pricing-of-Initial-Public-Offering (appears to be source everyone's quoting)

 

[CCarter]

only offered 10 million shares. (so they raised 140 million still pretty good)

Where did you get that? I'm a bit confused. They offered 10 million shares, but only did 5.8 million in trading volume today. Did all the shared they offer get gobbled up? I'm geniunely curious about this.

Found this piece of news:

SEMrush provides a software-as-a-service platform that helps companies reach the correct audience for their content, using the appropriate channels and in the right context, the prospectus said. SEMrush had 404,000 active free customers and 67,000 paying customers in 2020. The company isn’t profitable, posting $7 million in losses on $124.9 million in revenue for the year ended Dec. 31, a prospectus said. It had 308 employees.

Source: 6 Companies Made Their Trading Debuts Thursday. All but One Break.​

 

[miketpowell]

Where did you get that? I'm a bit confused. They offered 10 million shares, but only did 5.8 million in trading volume today. Did all the shared they offer get gobbled up? I'm geniunely curious about this.

Found this piece of news:

SEMrush provides a software-as-a-service platform that helps companies reach the correct audience for their content, using the appropriate channels and in the right context, the prospectus said. SEMrush had 404,000 active free customers and 67,000 paying customers in 2020. The company isn’t profitable, posting $7 million in losses on $124.9 million in revenue for the year ended Dec. 31, a prospectus said. It had 308 employees. ​

​

Source: 6 Companies Made Their Trading Debuts Thursday. All but One Break.​

I'm not sure but I believe they sold 10mm shares at $14 each Wednesday afternoon off-market so to speak. Then it opened up for general trading on Thursday and that 5.8mm trading volume is people trading those 10mm shares today.

https://seekingalpha.com/news/36760...ces-ipo-at-bottom-of-range-14-dollars-a-share

 

[Ryuzaki]

Semrush is now officially celebrating / stunting on us with their NY Times Square ad. We cannot let this stand. Time for BuSo to go public!

​

Congrats to the Semrush team. I don't use the product but there's nothing more addictive than checking my site's traffic graphs on their free accounts every month. They aren't necessarily accurate in their estimations but I've (they've?) gamified it in my mind. It's more fun to push that curve up than my actual, real deal analytics for some reason.

 

[secretagentdad]

if you had trusted our industry blow hards you would be up a few bucks right now.

https://www.renaissancecapital.com/Profile/SEMR

I don’t buy stonks but I think she’s worth 25ez.