IPOs 2021: Samsara Leverages PaaS Strategy for Growth

According to a recently published report, the Global Internet of Things (IoT) Market was estimated at $310 billion in 2020 and is expected to grow 25% annually to $1.84 billion by 2028. San Francisco-based IoT company Samsara (NYSE: IOT) went public last year and recently announced its fourth-quarter results.

Samsara’s Offerings

Founded in 2015 by John Bicket and Sanjit Biswas, Samsara allows businesses that rely on physical operations to harness IoT data to develop actionable insights and improve their operations. Its data platform ingests, aggregates, and enriches data from IoT devices and a growing ecosystem of connected assets and third-party systems, making data actionable for use cases through its applications.

Samsara was set up with a mission to increase the safety, efficiency, and sustainability of the daily operations of various industries. To achieve this vision, Samsara created a Connected Operations Cloud that allows businesses that are reliant on physical operations to leverage data gathered from various devices to develop actionable business insights and improve operations.

Samsara’s offerings were targeted across various industries including transportation, wholesale and retail trade, construction, field services, logistics, utilities and energy, government, healthcare and education, manufacturing, food and beverage, and others. These industries operate high-value assets, manage large workforces, complex logistics and have distributed sites that face environmental, safety and other regulatory requirements.

Samsara believed that despite the importance of these industries in global economies, they were still dependent on legacy systems that were siloed and lacked cloud connectivity. Without connected digital tools, these industries had to rely on historical data and were not able to achieve complete operational visibility or drive meaningful improvements in productivity.

Samsara solved the problem by using IoT connectivity, AI, cloud computing, and video imagery to drive digital transformation of physical operations. Its Connected Operations Cloud allows customers to visualize their physical operations in real-time. It consolidates data from its IoT devices and an ever expanding ecosystem of connected assets and third-party systems, to simplify access, analysis and management of data, and associated insights. Its differentiated, purpose-built suite of solutions enables organizations to adopt and deploy a digital, cloud-connected strategy across their operations.

Its customers include small businesses, state and local governments, and large, global enterprises with complex operations.

Samsara’s Financials

Samsara recently announced its fourth quarter and fiscal year results. For the fiscal year, its revenues grew 71% to $428.3 million and net loss was $0.42 per share.

Fourth quarter revenues grew 66% to $125.8 million and net loss was $0.05 per share. Among key metrics, ARR grew 64% to $558.1 million. The numbers of customers with ARR of over $100,000 grew 78% over the year to 806.

For the first quarter, Samsara forecasts revenues of $130-$132 million with a net loss of $0.08-$0.07. For the fiscal year, it forecasts revenues of $568-$578 million with a net loss of $0.27-$0.25.

Samsara’s Growth Focus

Samsara continues to innovate across its product offerings. It recently announced three new products that will elevate citizen services, improve public safety, and better utilize taxpayer dollars. Coverage Map displays a real-time view of streets traversed by fleet vehicles over a specified time, allowing administrators to track progress. Coverage Map Live Share allows administrators to share a publicly accessible view of the Coverage Map, allowing the communication of the status of services delivered to external stakeholders. Material Spreader Integration connects data between Samsara and the existing third-party spreader system, maximizing material usage and reducing costs.

Samsara banks on a healthy partner ecosystem for growth. Its Connected Operations Cloud serves as the central hub for its partner connections. Its ecosystem includes over 125 third-party integrations in the Samsara App Marketplace, a portal through which customers can connect its Applications to external applications. It also has an Experts Marketplace that features a network of certified system integrators, consultants, and implementation partners, who provide services to its customers. Additionally, it partners with leading OEMs who embed sensors and connectivity into their products, enabling customers to bring IoT data from their assets into its Data Platform without aftermarket IoT devices.

Samsara competes with players like Azuga Fleet GPS, Tookan, fleetx, and many more, all of which provide similar capabilities to its customers. But Samsara stands apart from this crowd because of the quantity and diversity of IoT data types on its Connected Operations Cloud, together with the analytic insights that it provides its customers, differentiating it in the market. Last year, its Data Platform processed over 38 billion minutes of video and collected over 2 trillion data points.

Prior to going public, Samsara had raised $930 million in seven rounds of funding led by Raison Asset Management, Warburg Pincus, AllianceBernstein, Tiger Global Management, Sands Capital Ventures, Andreesen Horowitz, Dragoneer Investment Group, Franklin Templeton Investments, General Catalyst, and General Atlantic. It went public at a valuation of $10.7 billion by selling the stock at $23.00 apiece. Its stock is currently trading at $17.47 with a market capitalization of $9 billion.

Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article.

Photo Credit: marcinjozwiak from Pixabay

This segment is a part in the series : IPOs 2021