Last month, investors went absolutely bananas for software initial public offerings, or IPOs. No company highlighted the craze more than Snowflake (NYSE:SNOW) — shares of which have more than doubled from their initial price.
But in the Snowflake-induced haze of IPO stocks, another company caught my attention: JFrog Ltd. (NASDAQ:FROG). This company checks off a lot of boxes that I look for in an investment: founder-led, strong balance sheet, and a barbell approach that seems to be working very well.
That said, two issues give me pause. Read below to get the whole story.
First, the company from 30,000 feet
I’m a big fan of solid mission statements. When those mission statements can easily convey what a technology company does to a non-techie like myself, I like it even more. JFrog’s mission is “to power a world of continuously updated, version-less software.” The company calls this “Liquid Software.”
If that still sounds confusing, think of it this way. Back in 2000, when I used TurboTax to do my taxes, I had to go to the store, buy the CD-ROM with the most up-to-date version (there are always tax changes), and install it on my computer. Only then could I actually start putting my information in.
Today, TurboTax has moved to the web. There’s no physical CD to buy; the software is all updated by the time tax season starts. Huge parts of the process have been eliminated.
But JFrog wants to take it one step further: eliminate even periodic updates, allow software to be continuously and instantaneously updated. The company has six different modules that customers can use to do this, ranging from its core Artifactory (where coding packages can be stored) to Xray (scanning and securing software updates) to the actual distribution of those