The Covid-19 pandemic has paved the way for a huge year for marketing and customer experience platforms like Sprinklr. Now, with the company looking to build on its productive 12 months with the launch of an IPO, it’s clear that the industry expects eCommerce to become even more digital in the age of the ‘new normal.’

Sprinklr had been mulling over an IPO since late 2019, when CEO Ragy Thomas told CNBC that the company would go public over the course of the coming two years. But as Covid-19 wreaked its disruptive influence over consumer behaviour in 2020, it left organisations like Sprinklr looking at a lucrative path towards the public markets. 

The customer experience management and marketing platform has raised around $430 million in venture capital funding from various investors, including Hellman & Friedman, JC2 Ventures, Glean Capital, ICONIQ Capital, Intel Capital and Conductive Ventures, and most recently gathered $200 million in September 2020 to achieve a post-money valuation of $2.7 billion. 

However, as market momentum has continued to ramp up, Sprinklr’s $2.7 valuation in 2020 nearly doubled to $5 billion ahead of its IPO. With the company looking to raise $361 million, 19 million shares are set to be offered out at a range of $18 to $20 each ahead of Sprinklr’s listing on the New York Stock Exchange. 

The Rise of eCommerce IPOs in 2021

The eCommerce boom is expected to continue to build momentum throughout 2021 after a prosperous 12 months. In fact, media agency GroupM has forecasted an increase in global eCommerce revenue from $3.9 trillion in 2020 to $4.6 trillion in 2021. One of the biggest drivers for this growth can be found in the burgeoning food delivery market, and 2021 has already been punctuated by the listing of DoorDash and UK takeaway delivery startup, Deliveroo. Soon, we’ll also see the arrival of Instacart into the IPO space - a company that’s managed to more-than double its valuation during the 2020 boom. 

(Image: Seeking Alpha)

As the data above shows, global IPOs have raised an unprecedented amount of money over the course of the first quarter of 2021. This has largely been driven by companies looking to capitalise on prosperous years following the Covid-19 outbreak. 

Although global lockdowns and social distancing measures have been difficult for consumers and workers alike to come to terms with, it’s generated a newfound level of reliance on the aforementioned delivery services and eCommerce platforms as a whole. 

Although we’re now beginning to emerge from the midst of the pandemic, data suggests that the new behaviours adopted by consumers in terms of shopping online and consuming products and services without leaving the house is here to stay. 

In opting to go for a 2021 flotation, Sprinklr has been afforded an insight into the overperforming IPO market and subsequently chosen its time well in looking to capitalise on the widespread market optimism for companies going public. 

Interest in Customer Experience Reaching Fever Pitch

Interest in Sprinklr’s IPO is high, with online brokerages like Freedom Finance Europe creating an online portal to facilitate the purchase of the offering - albeit subject to a rigorous application process. 

Maxim Manturov, Head of Investment Research at Freedom Finance Europe, says that: “Historically, institutional investors get around 90% of all shares, with only around 10% left for retail trades. This is where allocation comes from: when the demand is high, the broker will have to reduce order amounts so as to at least partially fill all of them. The allocation ratio, meanwhile, depends on the investor trading activity and volume.”

Other, more traditional brokerages like Fidelity and TD Ameritrade have also been expected to list the IPO, although the financial threshold attached to these IPO investment options is typically far higher than that of Fidelity, with a threshold of at least $100,000 needing to be met. 

Brokerage interest in IPOs from companies like Sprinklr is telling of how revered customer experience specialists have become in the current marketing climate. According to a report by ResearchAndMarkets in 2018, the global customer experience management market is anticipated to grow to $21.3 billion by 2024 - representing a CAGR of 22% over the six-year period. 

The recent development of machine learning has helped to offer greater software value to enterprises by offering recommendations and a more vertical industry focus. However, for companies like Sprinklr, arriving on the public markets is just the beginning of a battle for dominance. 

In terms of competition, there’s much to be reckoned with when it comes to customer experience companies. Notably, key industry players like Adobe, IBM, Medallia, CA Technologies, Avaya, Aon Hewitt and Survey Monkey will all be vying for exposure in what’s become an industry in demand for B2C companies. 

Sprinklr has demonstrated impressive growth and strong adaptability during the disruption caused by the Covid-19 pandemic. Now, in going public, the company has the opportunity to take its momentum and capitalise on an IPO boom that’s sweeping a range of industries around the world. 

Will the company’s arrival on the New York Stock Exchange pave the way for a challenge to the market dominance of the likes of Adobe and IBM? For a company that may have timed its IPO to perfection, nothing can be ruled out.