nCino: DD and IPO information

Sounds like a biggie. Coming to a 212 near you next Wednesday.

I’ll tell you right now, I know nothing about them so don’t even ask. This one is purely for the ones who like a flutter. After Lemonade last week…


Hi, can nCino be active before market on Monday 13th? This is important. I have all my money on trade212.

Do a search of ‘new IPOs’ and review the previous posts to get a sense of how it works.

Decided to do a bit of DD, by no means as holistic as the likes of @jcksmith850 is pulling out the bag but it’s a place to start;


What do they do?
Operator of a cloud-based banking platform designed to deliver complete banking services. The company’s banking platform integrates directly with a bank’s core accounting system and encompasses customer relationship management (CRM), loan origination, enterprise content management and data analytics among others, enabling financial institutions to meet regulatory compliance, drive profitability and optimize operational transparency.


Their Product

Built as a single, multi-tenant SaaS (software-as-a-service) platform, the nCino Bank Operating System is an end-to-end digital banking platform that is flexible, scalable and designed to help reduce costs by improving employee efficiency and productivity. It aims to transform the way financial institutions operate, go to market and interact with their clients, while delivering measurable return on investment through innovations in Commercial and Retail Banking, Portfolio Analytics and Deposit Account Opening, creating a seamless user experience and simultaneously creating internal and regulatory transparency via their comprehensive warehousing, analytics and reporting suite.

Fundamental elements of the nCino Bank Operating System are built on the Salesforce platform, which allows them to focus their product development efforts on building deep vertical functionality specifically for banks and credit unions while leveraging the Salesforce Platform’s global infrastructure, reliability and scalability.

The Company

Founded: 2012

Employees: 900

CEO: Pierre Naudé (Co-founder)

Industry: Fintech

Mission: To transform financial services through innovation, reputation and speed.

Their client base boasts 1,100+ financial institutions including Bank of America, Santander, Barclays, Allied Irish Bank, Yorkshire Building Society and Truist Bank.

161 of these pay >$100k per year
21 of these pay >$1m per year

The Figures

To date nCino have received $213.2m in funding and they hope to achieve further capital of$182.4m through the IPO.

nCino derive their revenues from;

  1. Subscriptions, consisting principally of fees from customers for Operating System access as well as maintenance and support services that are offered under non-cancellable multi-year contracts, which typically range from three to five years.

  2. Professional services fees, such as implementation and configuration assistance, training and advisory services.

Their financial history is rather limited but the last three years are captured as follows;

For fiscal 2020, 2019 and 2018, they had subscription revenue retention rates of 147%, 163% and 188%, respectively.

The Landscape

With an addressable market of $10b, if they play it right nCino have a dearth of opportunity for expansion, especially in Financial Services where turnover is frequent at all levels of the business and good word of mouth regarding efficient OSs can spread from firm to firm.

nCino have deployed their software to 10 countries, but only 8% of their business sits outside the US. That’s a massive market yet to be tapped. They have also recently entered into a joint venture with K. K. to facilitate entry to Japan.

As far as peers go, it’s a mix of well-established ‘old dogs’ such as Oracle FLEXCUBE and younger companies making the same moves in other jurisdictions and far less funding;

  • Mambu (Berlin), $42m
  • Oradian (Zagreb), $1.8m
  • Leveris (Dublin), unable to source

As with most fintech operations COVID-19 has barely made an impact. Financial institutions have barely slowed down and have been one of the main sectors whereby working from home was embraced fully.

In 2018, nCino ranked 24th in Forbes Cloud 100 List, an annual ranking of private cloud-computing companies in the tech sector.

In 2019 they made it to 20th place, the second-highest of any fintech ranked companies (after Plaid).

What nCino have over their competitors

  • First mover in this sector. Experience. Reputation. Established in multiple geographies
  • Single SaaS platform
  • In the business of fundamentally changing the way financial institutions operate
  • Backed by Salesforce, who are one of their three largest investors

Growth Opportunities

  • Expansion, both to new clients but also within and across existing
  • Large underserved market of institutions still using legacy point products
  • Ex-USA market vastly untapped
  • Strengthening and extending product functionality

Risks and Downside

  • Limited financial history, difficult to predict future results. A history of operating losses
  • Cloud banking market may not grow as quickly as anticipated
  • Not disruptive enough. Lots of peers doing the same or similar
  • Sustaining current revenue growth rate could prove a challenge. Quarterly results might fluctuate
  • Fundamental elements of the nCino Bank Operating System are built on the Salesforce Platform. Reliant on agreement with Salesforce to provide solution to their customers
  • Because nCino recognize subscription revenues over the term of a contract, downturns or upturns in business may not be reflected in results of operations until future periods
  • Any downturn or decrease in technology spend in the financial services industry


Ticker: NCNO

Date: 15 July 2020

Price Range: $22-24 per share

Shares: 72.6m

Target: $182.4m

Implied Market Cap: $4.6b

Final Thoughts

While I recognise that nCino aren’t changing the cloud banking game (it’s tough to get disruptive in this sector I think) there is massive scope for efficiencies across the industry and what they are doing is user friendly, intuitive and easy on the eye.

What I didn’t like seeing was net loss going up with revenue; not a nice trend. But there are plenty of companies out there that ran a negative for years before seeing a silver lining. And with some humungous players in the banking world up for grabs, a big fish could send these guys to the next level.

63.3% of common stock is held by their three largest stockholders. I’m not sure if that will have any bearing next week but I strongly doubt these guys will price at $24 when we get our chance to buy in. Not likely to be as extreme as Lemonade was last week but it wouldn’t be unreasonable to expect an opening between $30-40.

Likely to have a lot of energy at first then peter out for a while. I can see this being a slow burner on the market, a real long term play, but I can also see an initial sharp incline upon float. Their reputation seems to precede their bottom line.

There’s a strong view that US stocks and Tech stocks in particular are overvalued currently and that this could be hit with a second crash or a correction at any time. One upshot is that the timing of nCino’s IPO might mean that they are largely unaffected by any counter-reaction the market might have as they are, by virtue of how young they are in the market not overvalued. That is unless you think the implied market cap is already too strong. $4.6b?.. possibly.

Personally I’m undecided but that’s nothing to do with the company and all to do with my own evolving ethos. I’ve spent the last few weeks drastically downsizing my folio, stripping out the chaff and condensing down to a smaller number of companies I really believe will pioneer in their respective sectors. I’m just not sure nCino fit that bill. More thinking to do…


  • nCino demo
  • SEC S-1 filing
  • Owler
  • Asset Match
  • Crunchbase
  • Pitchbook
  • Growjo
  • Forbes

Very good analysis @Joey_Fantana, entertaining to read and very informative.

I think this has swayed me to doing some research into nCino and I think I will probably buy a couple of shares.

Just a question, do you know why their retention rates, which I understand as customers that repeat their order in a subsequent year, are over 100%?

For fiscal 2020, 2019 and 2018, they had subscription revenue retention rates of 147%, 163% and 188%, respectively.


Thanks. I did mean to try and find that out actually but it was late so it got away from me. I’ll try and find out today.

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Oh and by the way… Called it.

Definitely going to be closer to $40 I’d say.

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@EquityInvestor - from their S-1 prospectus:

"We calculate our subscription revenue retention rate as total subscription revenues in a fiscal year from customers who purchased any of our solutions as of January 31 of the prior fiscal year, expressed as a percentage of total subscription revenues for the prior fiscal year. Our subscription revenue retention rate provides insight into the impact on current year subscription revenues of:

- the number and timing of new customers and phased activation of seats purchased by them in prior years, which activation schedules can span several fiscal years for larger contracts;*
- expanding adoption of our solutions by our existing customers during the current year, excluding any revenues derived from businesses acquired during such year; and*
- customer attrition."

Seems a bit fudgy but something everyone does I reckon. Make yourself look a bit better.

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As long as the number is consistent, then I guess it can be done that way. A bit confusing, yes.

Also, not impressed by their increasing valuation :joy:

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I just love how the description in that box cuts off after saying shares are going to be priced at $28 and that makes the company worth $2.50

Ha ha good spot.

There we go @Dao:

nCino have bumped their pricing again to $31.

I might’ve gone in at $22-24 but into the thirties seems a bit steep.

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Ncino came into Trade212 around 70/share?

Yeah I saw that. More than I expected. Oh well just wait for the drop.

@EquityInvestor @Magic - down 13% today. Way overpriced yesterday!

Keep watching and waiting.

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