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Identity Software Startup ForgeRock Adds to Week’s IPO Gains

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(Bloomberg) -- ForgeRock Inc., a maker of identity-verification software, rose 46% in its trading debut, joining a dozen U.S. initial public offerings that have delivered first-day gains this week.

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The San Francisco-based company raised $275 million, selling 11 million shares for $25 each after marketing them for $21 to $24. The shares closed at $36.50 Thursday in New York trading, giving ForgeRock a market value of about $2.9 billion.

Accounting for stock options, restricted stock units and preferred and common stock warrants, the company would have a fully diluted value of more than $3.3 billion.

ForgeRock is the 12th in a swarm of IPOs this week that have raised $4.38 billion on U.S. exchanges, according to data compiled by Bloomberg. So far, shares of those companies, which don’t include blank-check companies, are trading 45% above their IPO prices on a weighted average basis, the data show.

Technology consulting firm Thoughtworks Holding Inc.’s $774 million listing was the largest of those IPOs. On Holding AG, the maker of On running shoes backed by tennis star Roger Federer, has now topped that with $858 million including so-called greenshoe shares issued after the trading debut by underwriters.

Banks, Cars

ForgeRock Chief Executive Officer Fran Rosch said the company’s customer base has grown beyond financial services firms and banks to include more clients in health care, retail, telecommunications and even the auto industry.

“More and more of us are doing our work remotely and we’re banking and shopping -- and health care and public services -- online,” Rosch said in an interview. “That creates a really strong demand for digital identity products.”

The IPO proceeds will be used to continue to double down on technology innovation, he said.

“One of the trends that we see in the enterprise space is that desire to have a converged platform, a single enterprise platform, to manage all of your identities,” Rosch said. “We see that as a way for us to maybe land within an account and expand.”

ForgeRock had a net loss of $20 million in the first six months of the year, down from $36 million in same period in 2020. Meanwhile, its revenue for that period climbed to $85 million from $55 million, according to the filing.

In April 2020, ForgeRock said it raised almost $94 million in a funding round led by Riverwood Capital and included investors such as Accel, Meritech Capital Partners and Foundation Capital. Those firms each control 5% or more of the company’s shares, according to the IPO filing.

Accel’s Timeline

Arun Mathew, who lead’s Accel’s growth investments in the enterprise, security and infrastructure markets, said he’s seeing more of the firm’s companies accelerating growth rates as they scale up.

“We traditionally don’t see that,” Mathew said. “As companies get bigger, their growth rates start to decrease. So I think we’re moving up the IPO timeline for a number of companies just given all the tailwinds that we’re seeing around the categories we’re investing into.”

ForgeRock’s offering was led by Morgan Stanley and JPMorgan Chase & Co. The shares are trading on the New York Stock Exchange under the symbol FORG.

(Updates with CEO’s comments in sixth paragraph)

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