Quick S-1 Teardown: nCino

Subscription Revenue Retention ( FY18, 19, 20): 188%, 163%, 147%– strong “land and expand”.

HIGH LEVEL THOUGHTS & & LESSONS:.

Product: multi-tenant SaaS to digitize bank workflows consisting of bank onboarding, loan origination, and account openingBuilt on salesforce, currently on a 7 year license with them.

NOTES.

Financial Results:.
Income (FY18, 19, 20): $ 58M, $91M, $138M (54% CAGR, membership growing at 65% CAGR).

Consumers:.
1.1 K banks on the platform.
290 overall consumers.
Clients include BofA, Barclays, Santander, TF, in addition to neighborhood banks and cooperative credit union.
161 > > $100K ACV customers.
21 > > $1M ACV consumers.

nCino is a rejuvenating example of a successful software business thats built a bit outside of whats currently in favor in equity capital circles:.

Bottom line (FY18, 19, 20): $ 18.6 M, $22.3 M, $27.6 M.

Service heavy, no bottoms up GTM: nCino offers its products through AEs, with long sales cycles, and considerable application services are included.

Market: $ 10B functional addressable market.

Platform dependency? Being built on top of somebody elses platform is frequently a concern for financiers. nCino is developed on top of Salesforce (like Veeva). Theyve apparently safeproofed this relationship by reselling Salesforce products in their deals, and raising money from Salesforce, wnich is a large financier.

$ 178.8 M Q1 2021 run rate– on the lower end of the spectrum of current SaaS IPOs.
$ 35M of services income in FY20.

Mixed Gross Margin ( FY18, 19, 20): 48%, 49%, 54%.
Subscription Gross Margin ( FY18, 19, 20): 67%, 69%, 70%.

( As a side note: we often do those S-1 summaries internally to keep tabs on the software application IPO market, so my colleague Avery Klemmer and I figured we d “open source” this one in case it might be intriguing to others– comments and thoughts welcome. Our firm FirstMark is not an investor in nCino).

The upcoming nCino IPO is an intriguing story, and an excellent pointer that strong cloud/SaaS business can be developed outside of the normal Silicon Valley or NYC endeavor course (even with VCs on board).

Shareholders:.
Insight– 46.6%.
Salesforce– 13.2%.
Wellington%– 9.5%.
CEO– 1.6%.
Total raised: $213.2 M from Salesforce, Insight, Wellington, T Rowe Price.

Background: started in a bank, spun out in 2011.

Not a Silicon Valley or NYC story: Launched in 2012 by executives of North Carolina-based Live Oak Bank as a spin-off venture. Still based in Wilmington, North Carolina.

Vertical software application: Many VCs these days tend to choose broad horizontal chances, with an issue that vertical software application eventually has a limited TAM, even a big one– but nCino is 100% focused on the banking market.