Intapp, the firm management platform for lawyers and the financial services sector, has finally publicly filed for its IPO. And LegalZoom, the consumer and SME legal platform, has also re-filed for an IPO on the same day – Friday, June 4.
Interestingly both appear to have experienced a delay in filing. In Intapp’s case it is understood they moved to do this back in December 2020 and got as far as picking their bankers – before the pandemic presumably caused things to slow down.
However, for LegalZoom, the delay has been almost a decade – (see Barrons). And as TechCrunch reported, the company first planned to list back in 2012 for $120m – but cancelled the listing due to market conditions.
The SEC filing for Intapp, which was made public last week, states that they ‘are an emerging growth company’ and made $186m in revenues for 2020. Both companies noted a ‘Proposed maximum aggregate offering price’ of $100m, although it’s not clear if that will be the actual figure once they IPO.
The Palo Alto-based Intapp was founded in 2000 and plans to list on the Nasdaq under the symbol INTA, according to Renaissance Capital. J.P. Morgan, BofA Securities, Credit Suisse, Piper Sandler, and Raymond James are the joint bookrunners on the deal.
The company had over 1,600 clients as of March 31, 2021, including 96 of the Am Law 100 law firms, 7 of the Top 8 accounting firms, and over 900 private capital and investment banking firms. Intapp sells its software on a subscription basis through a direct enterprise sales model.
In the filing the company said: ‘Our deep understanding of the professional and financial services industry has enabled us to develop a suite of solutions on the Intapp Platform tailored to address these challenges faced by firms. We offer two solutions: DealCloud and OnePlace.’
And in terms of financials, they added: ‘Our total revenues for fiscal year 2020 were $186.9 million, an increase of 30% over the total revenues for fiscal year 2019 of $143.2 million. Our total revenues for the nine months ended March 31, 2021 were $153.4 million, an increase of 10% over the total revenues for the nine months ended March 31, 2020 of $139.3 million.’
While in relation to tech, they emphasised the use of AI: ‘The use of AI is creating a significant competitive advantage. AI is poised to play a bigger role in transforming the professional and financial services industry relative to other industries, since value delivered by professionals in the industry is centred around providing knowledge, insight, and advice.
‘Collecting, aggregating, and subsequently synthesizing the vast amounts of data in real-time to extract actionable intelligence is critical for firms in the professional and financial services industry, yet nearly impossible to do without the use of AI. Furthermore, AI is able to automate processes to deliver those insights with great speed. The use of AI is creating significant competitive advantages for firms by enabling them to unify disparate data sources, surface key insights, manage unforeseen risks, and increase efficiency through higher levels of automation in core processes.’
While for LegalZoom, they said in their filing: ‘We generated revenue of $408.4 million in 2019 and $470.6 million in 2020, representing a year-over-year increase of 15.2%, and $105.8 million and $134.6 million for the three months ended March 31, 2020 and 2021, respectively, representing a period-over-period increase of 27.3%.’
And: ‘LegalZoom commenced operations in 2000 so more people could access legal help. Initially, we focused on business formation, intellectual property, and estate planning. Over the years, we have expanded our offerings to cover a broader set of legal, compliance, tax and business services for small businesses.
‘In 2020, we helped form 10% of all new LLCs and helped incorporate 5% of all new corporations in the United States. In addition, 25,000 trademark applications, or 6% of all trademark registration applications in the United States in 2020, were made through LegalZoom. At December 31, 2020, we had over 1.0 million subscription units outstanding and were one of the largest registered agent providers for small businesses in the United States. As a result of this success, we have become the leading brand in online legal services, with 70% aided brand awareness as of December 2020 according to a 2020 study hosted by Dynata.’
So, basically, wow. Two IPOs.
ALSP Axiom famously planned an IPO before splitting into different segments, and many law firms have done IPOs now across the UK and Australia. However, for legal tech companies it remains a rare thing. Although of course, Thomson Reuters is a listed company, and LexisNexis’ parent RELX is also listed.
However, it’s a pathway that not every legal tech company can contemplate, after all Intapp’s revenues for 2020 were around $190m – few companies in this sector have this level of income and hence a good shot at an IPO. That said, a small number of other major platforms that reach this kind of revenue could well now go the same way.
In terms of how that changes things, it may not change everything, but it does open up new flows of capital, as well as also creating very high growth expectations that can often lead to acquisitions and internal restructurings as shareholders push to maximise returns.
And last – why now? The answer is most likely that the pandemic is starting to recede in the US and business confidence is returning. The final question is: who is next?
1 Trackback / Pingback