Semrush plans to go public after posting big 2020 growth

Semrush on Monday declared it is planning on going public through an initial public offering of its Class A A typical stock. The company will be listed on the New York Stock Exchange under the ticker sign “SEMR.”
The numbers. The Form S-1 statement shows the numbers behind the SEO tool platform. In 2020 the company had just under $125 million in revenues, which was up from $92 million in 2019. The awful profit was just under $95 million in 2020, compared to just under $70 million in 2019. Semrush spends a lot on marketing, spending $54.5 million in 2020 and $41.7 million in 2019. This resulted in a $7 million net loss in 2020 and a $10 million net loss in 2019.

About half of its revenue is driven by U.S. customers.
The company did take in the budget of $40M in 2018.

Customers. Semrush said it had 67,000 paying customers in 2020, up from over 54,000 in 2019. Keep in mind, in 2010 the company had just exceeded 1,000 customers, and in 2015 it broke the 15,000 customer mark. On the other hand, the company said it had 404,312 active free customers in 2020.

The company also said it has performed over 300,000 students and has issued over 130,000 certificates all-time through its Semrush Academy, an online learning platform.
Here is a chart in the filings that demonstrates annual subscription revenue by cohort:

Concerns. The company listed its risks elements, here are some of what they listed:
“Our business and operating results will be damaged if our paying customers do not upgrade their premium subscriptions or if they fail to buy extra products.”
“If we fail to tempt new possible customers through unpaid and paid marketing efforts, register them for tests, and convert them into paying customers, our operating results would be damaged.”

“The market in which we employ is extremely competitive, and if we do not compete effectively, our ability to attract and maintain free and paying customers could be damaged, which would negatively influence our business and operating results.”
“Our products depend on publicly available and paid third-party data sources, and, if we lose access to data provided by such data sources or the terms and conditions on which we receive such access become less profitable, our business could damage.”
“Changes by search engines, social networking sites, and other third-party services to their underlying technology formats or policies considering the use of their platforms and/or technologies for commercial purposes, including anti-spam policies, may restrict the effectiveness of specific of our products, tools, and add-ons and as a result, our business may suffer.”

Other products. The company said it has more than 50 tools in its ecosystem and that it aims to continue adding to its portfolio through investments. The company most recently bought Prowly, a PR service, in September.
Competitive insight. Rand Fishkin, the founder of Moz and former CEO who left the company in 2018, shared his opinions on this news. Few know the area like him. He said it is “really remarkable what they’ve done the last 6 years. Semrush went from 3rd/4th place in SEO software, to a clear #1 in revenue & growth rate. Ahrefs is #2 at ~$55-75M, with Moz in 3rd (~$45M)* at a slower growth rate (after leading for years prior).” He did point out these are guesses at the other company numbers but his guesses would be better than most.