The second quarter is racing to a close. Amazingly, we’ll soon dive into July and the third three-month period of the year. That means earnings seasons (good!), summer (good!), and your partner taking you on hikes (bad!).

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But what matters for us this morning is momentum. More simply, in what sort of shape is tech dragging itself across the Q2 finish line?

To my surprise, it feels like the tech world is wrapping the first half of 2019 strongly. Let’s take a peek at some secondary signals that could give us a rough proxy for where tech is heading.

With the quarter nearly over, the Crunchbase News team is prepping our regular set of venture capital reports. We’ll have those turned in and hitting the presses right after the Fourth of July. But that’s to come, today we’re hunting around the edges.

Signals

We’re looking at three types of value today. We’ll start with the most exotic, move to the largest in terms of worth, and then examine the highest velocity.

Crypto, Again

Let’s start with cryptocurrencies. Now, you’ve stopped thinking about them after the great bitcoin crash that started as 2017 came to a close and effectively turned what had been a sure thing into, once again, a joke.

Things then got worse for the world of digital currencies and distributed ledgers as 2018 slumped in 2019. The value of a single bitcoin slipped under $4,000. The situation turned around in April of this year as bitcoin began to rally. And it’s kept going, recently cresting the $9,000 mark. All its friends added in, and the cryptocurrency market is worth just under $288 billion today, according to .

That’s up around 2.5x the figure’s lows. Recovery? Dead cat bounce? I don’t know, but watching bitcoin go full Lazarus is not a bearish sign.

Next, the stock market from two angles. First, incumbents. Second, upstarts.

Did you know that is up around 50 percent from its 52-week lows? Facebook’s lowest point in the last year was $123.02 as 2018 finished. The company’s share price has recovered in 2019, up to over $180 as of the time of writing. Sure, Facebook is still about $40 per share off highs, but the company’s sins have largely been forgiven by the market.

The techlash is more a media and Washington phenomenon than it is Wall Street fear, at least when it comes to the biggest tech shops. Facebook is worth $517 billion. is still worth north of $1 trillion. is worth $886.8 billion, $920.5 billion, and $753.4 billion.

So, at the top of the market, everything looks good. Sure, there’s some rustling for a new regulatory regime. But as one party is concerned about phantom bans centered around a caricature of their own political belief, and the other is led by animus for hard-to-regulate platform power, it seems unlikely that the Capitol will be able to get off its own hands and do anything.

The big companies are going to be fine.

And the smaller shops are doing well, too. is sharply higher from its recent IPO price. As is and . Even is back over its IPO price.

Vectors

From three angles, then, the tech world is chugging along. The old money is doing well. The giants are healthy and fat and rich. The new money is doing well too, with new offerings finding rapturous reception from public investors. And the putatively next money is doing well, too.

It’s a go from all three sides. The money in the middle of the three — venture capital — will give us a final look at the sector’s health. But if we use external signals to guess, I suspect the Q2 venture numbers will be just fine.

Illustration: Li-Anne Dias.

After shares of and priced strongly and enjoyed strong first-day debuts, the IPO cycle put up more points this morning with the successful debut of . Chewy, an online pet supply group, , raising just over $1 billion and putting up a market cap just a shade under $9 billion.

That value, however, has been quickly outstripped. Chewy is currently worth $39.66 per share, up 27 percent as of the time of writing. That values the firm at around $15.9 billion if our morning math checks out.

Chewy has been up since the moment it began trading. The company’s first trade , up 63.6 percent.

So What?

Another IPO, another strong result, so what? Well, it’s all well and good that CrowdStrike did well in its IPO. It had quickly growing revenue and falling losses. That’s a great formula in today’s market; investors want growth, and falling losses indicate a model that works.

Fiverr was the same, albeit with slower growth. So, what did Chewy bring to the table?

The same. Chewy’s estimates for what amounts to its most recent quarter include revenue growth of $763.5 million in the year-ago period, to $1.11 billion. The firm’s net loss also slimmed from $59.8 million in the year-ago quarter, to $29.6 million in the most recent. Free cash flow, however, worsened from -$58.7 million in the year-ago period to -$63.4 million in the most recent quarter.

So Chewy mostly fits the current model of success, bringing growth and slimming losses. That makes its success understandable. At the same time, the company is selling Class A shares in its IPO, which come with one vote. Class B stock, which the company holds lots of, 10 votes per share. Harumph, I hate this sort of dual-class shenanigans.

But whatever, says the market, Chewy is worth around 64x times its current, annualized gross profit!

And with that, have an excellent Friday, , and have a great weekend.

Illustration: .

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And then it began trading today and instantly added billions to that figure, reaching the $12 billion mark . At current tally, the firm is worth around $57.31 per share, or $11.3 billion, on a non-diluted basis.

That’s a lot of money! A huge, epic, staggering mound of value. What, you might ask, is worth such a wall of cash? Well, look at this chart, drawn from page 10 of its S-1/A:

There are some good things in that, like greater-than-100-percent revenue growth. And there are some bad things, like continued operating losses, and gross margins in the low-seventies.

But what is fascinating is that CrowdStrike, which lost a little under $400 million in its three most recent fiscal years, is worth $11 or $12 billion. Plus, it looks on track to lose another $100 million this year unless profitability quickly improves.

At its Q1 high estimate, CrowdStrike is on an annual run rate of $383.8 million. That gives it a current run-rate multiple of 29 and change. Let’s presume it can keep growing, and add wrap the year with $600 million in revenue. That still works out to a current revenue multiple of around 19.

That’s super, duper, crazy high. SaaS companies are dancing around 10 times revenues, a historically high number. What’s up with 19x or 29x? It seems that public-market investors are still chasing growth with every bit of gusto as private-market investors. In 2019, an expected fourth-consecutive nine-figure loss is zero worries for investors happy to pour money into a company in a hot space with quick growth.

Which might be the right answer! But private investors valued CrowdStrike one way, and then bankers got a second guess in, and everyone was wrong, it seems. Even funnier, I expect that CrowdStrike is now a bit over its boots, value-wise (a bold prediction, I know), so while Wall Street looks silly today, that could all change after a single earnings report.

After all, growth-companies are learning that if that’s their bag, they can’t ever miss a quarter. No one knows what anything is worth!

Illustration: .Ìý

Let’s talk quickly about the IPO market. There’s , and we need to stay on top of it all.

First, intends to price 18 million shares tonight, between $28 and $30 per share. That’s a haul that should tip the scales at just over a half billion dollars. The firm will begin to trade on Wednesday. You can read our prior coverage of the company’s IPO here.

Notable about CrowdStrike is that it is another example of a that, in this case, didn’t seem to close off the IPO run. A good pricing experience probably helped the firm avoid the grips of a larger company.

Moving on, . Surprised that this company is going public? It’s still doing that. Expect Fiverr to sell 5.3 million shares at a price of $17 to $19 per share. The company’s risible ad copy won’t stop the firm from gettin’ out the door. Evidence, we thought, of the market showing that the IPO window is quite open.

Fiverr is to price on Wednesday, and trade on Thursday. The firm raised $111 million as a private company.

And finally, ! This company (fairly!) for its impending dual-class stock structure. It’s a case of capital winning thanks to the raw power of money, and a money-losing company selling second-class equity to the public in hopes of allowing them to fund its growth.

A deal! Putting aside the inane class setup (someone please make a Titanic joke), the company’s performance is kinda ok. It’s growing, its net losses are coming down. But Chewy’s cash burn on a both operating and a free cash flow basis are trending down. But, it’s 2019, and if Fiverr is going public I don’t see why Chewy can’t.

Expect Chewy to sell just under 42 million shares for $17 to $19 this Thursday, and trade on Friday.

Three IPOs in a week? Let’s go!

Image: Istock

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After the Lyft and Uber and Luckin and Fastly and Zoom IPOs, you are probably ready for a good, long break from public market coverage. Too bad.

There are a number of interesting offerings coming up that you need to understand and watch. So, please consider this morning’s Morning Markets as a homework assignment. The following companies are firms that you should become familiar with, and watch as they debut.

In every IPO, there’s a lesson. Here’s what’s next on the blackboard:

• GSX Techedu: Expected to trade this Thursday. Online tutoring for kids in China. The company is profitable ($5 million in net income off $40.1 million in revenue during Q1 2019), and growing quickly. The pretty neat firm, , expects to price between $9.50 and $11.50 per share, listing on the New York Stock Exchange under the ticker “GSX.”
• : Expected to trade this Friday.ÌýThis company sells fashion. It claims to be a “next-generation fashion retailer for Millennial and Generation Z consumers.” We’re including it on our list of companies to keep an eye on because “data-driven” and run on its own “custom, proprietary technology platform.” Notably, Revolve is also profitable, putting up just under $5 million in net income against $137.3 million in Q1 revenue. Look for this company to price between $16 and $18 per share and trade on the New York Stock Exchange under the symbol “RVLV.”
• : Expected to trade next Wednesday.ÌýCybersecurity shop CrowdStrike is shooting for a valuation of possibly more than $4 billion, making its IPO a big deal. And, as we noted in our prior coverage, the company’s recent financial results have a lot to like in them. Sure, the company still loses money but hey, that’s just 2019.
• : Expected to trade next Friday. Chewy expects to price between $17 and $19 per share, listing on the New York Stock Exchange under the symbol “CHWY.” Chewy is growing but losing money. Its gross profit grew from $150.0 million in the 13 weeks ending April 29, 2018, to $253.9 million in the 13 weeks ending May 5, 2019. And during that period of growth, its net loss fell from about $60 million to about $30 million. But its cash burn from operating activities and its free cash flow each worsened over the year. Active customers rose over the same period.
• : Expected to trade June 20th. Next up, everyone’s favorite direct listing. More here when we have it, but for now Slack’s growth is good, its got lots of money, and it’s doing its own thing.
• We don’t know when this company will start trading, but we did get our hands on its numbers recently. Learn more here.

Feeling good? Got all that? Good. I’m going to be offline for the Slack listing, but around for the rest. Get excited, it’s IPO season yet!

For more, check out our coverage of all neat 2019 IPOs here.

Illustration: .

The IPO interlude is over. This morning , a technology company working in cybersecurity, a price range for its initial public offering. The firm, which operates at a deficit, intends to sell 18 million shares for $19 to $23 apiece.

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Disregarding other shares that may be made available to its underwriters (, , , and others), the firm will raise between $342 million and $414 million in its debut. On a non-diluted basis, CrowdStrike would be worth between $3.7 billion and $4.5 billion at the two extremes of its proposed price range.

Is that a lot of money? Is that a high valuation? Let’s rewind the clock.

History, Etc.

Across a , , , , a , and a CrowdStrike raised $481 million according to Crunchbase data. That’s quite the haul for a private company.

Its largest round while private came to $200 million, which means that if CrowdStrike manages to price its IPO at the size and range that its documents indicate it may, the firm will raise more in its IPO than it ever did in a single round while private. In the era of direct listing and super- and hypergiant rounds, it’s almost an old fashioned situation.

Regardless, when CrowdStrike raised its , the firm was valued on a post-money basis at $1 billion, according to Crunchbase. Later, the firm added an additional $25 million to that round to “accommodate investor interest,” according .

But what matters is that in 2017, CrowdStrike had made it into unicorn territory. That streak continued in mid-2018 when the company raised its , a $200 million round that included participation from late-stage venture shop and private equity squad . With a $2.8 billion pre-money valuation according to Crunchbase data, CrowdStrike wrapped 2018 worth $3.0 billion.

So wherever CrowdStrike prices, provided that the bottom end of its range holds, it will secure an up-IPO. That’s good news for its backers, and the IPO market itself; after Uber and Lyft’s twin-disappointments, the IPO market could have turned cold. CrowdStrike, which expects to lose between $26.5 million and $25.7 million on an operating basis in the quarter is hoping that it stays temperate.

Finally, some financial notes.

The Numbers

In the quarter ending April 30, 2019, CrowdStrike grew its revenue from $47.3 million in the year-ago period to $93.6 million to $95.7 million. The company reported ranges, as its accounting for the quarter has yet to close.

With a gross profit of between $63.6 million and $66.6 million (its subscription gross margin came to 71 to 72 percent; services lowered its aggregate margin result), leading to the before-mentioned operating loss. The firm’s operating loss fell in the period, compared to the year-ago quarter.

This is an improvement over our prior notes regarding the firm’s performance, written after it first filed to go public.

Doubling revenue and falling losses are good notes to go public on. Indeed, check the firm’s non-GAAP supplementary table:

Ladies and gentleman, I present to you investor catnip. More when it prices.

Illustration: .