Prospectus Summary
PROSPECTUS SUMMARY This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our Class A common stock. You should read this entire prospectus carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, the terms “Samsara,” “the company,” “we,” “us” and “our” in this prospectus refer to Samsara Inc. and its consolidated subsidiaries, and references to our “common stock” include our Class A common stock, Class B common stock and Class C common stock. We maintain a 52-week or 53-week fiscal year ending on the Saturday closest to February 1. Our two most recent fiscal years ended on February 1, 2020 and January 30, 2021, and each consisted of 52 weeks.SAMSARA INC.
Overview
Samsara is on a mission to increase the safety, efficiency and sustainability of the operations that power the global economy.
To realize this vision, we pioneered the Connected Operations Cloud, which allows businesses that depend on physical operations to harness Internet of Things (IoT) data to develop actionable business insights and improve their operations.
Businesses in industries like transportation, wholesale and retail trade, construction, field services, logistics, utilities and energy, government, healthcare and education, manufacturing, food and beverage, and others are the backbone of the global economy. They operate high-value assets, coordinate large field workforces, manage complex logistics and distributed sites, and face environmental, safety and other regulatory requirements. We estimate that these industries represented over 40% of the global gross domestic product (GDP) in 2020. Yet historically, these industries have been underserved by technology, leaving them heavily reliant on manual processes and legacy systems that are siloed and lack cloud connectivity. Without connected digital tools, physical operations businesses struggle to access real-time data, making it nearly impossible to achieve complete operational visibility or drive meaningful improvements in productivity.
We are solving the problem of opaque operations and disconnected systems. By harnessing recent advancements in IoT connectivity, artificial intelligence (AI), cloud computing and video imagery, we are enabling the digital transformation of physical operations. Using our Connected Operations Cloud, customers can visualize their physical operations in real-time, on one integrated platform in a way that would have been impossible and impractical only a few years ago.
Our Connected Operations Cloud consolidates data from our IoT devices and a growing ecosystem of connected assets and third-party systems, and makes it easy for organizations to access, analyze and act on data insights, using our cloud dashboard, custom alerts and reports, mobile apps and workflows. Our differentiated, purpose-built suite of solutions enables organizations to embrace and deploy a digital, cloud-connected strategy across their operations. With Samsara, customers have the ability to drive safer operations, increase business efficiency, and achieve their sustainability goals, all to improve the lives of their employees and the customers they serve.
We provide an end-to-end solution for operations: Our solution connects physical operations data to our Connected Operations Cloud, which consists of our Data Platform and Applications. Our Data Platform ingests, aggregates and enriches data from our IoT devices and a growing ecosystem of connected assets and third-party systems, and makes the data actionable for use cases through our Applications.
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Our Connected Operations Cloud captures data that was previously siloed and difficult to analyze in several different ways. For the many physical assets that are still offline, our solution includes IoT devices that capture data and connect it to the cloud. For the physical assets that are increasingly embedded with cloud connectivity, we partner with original equipment manufacturers (OEMs) to capture data via application programming interfaces (APIs). Data may also be captured from customer enterprise applications or local software systems. This operational and information technology (IT) data is ingested into our Data Platform, where it is aggregated, enriched, and analyzed using embedded functionality for AI, workflows and analytics, alerts, API connections, and data security and privacy. Our Data Platform powers our Applications, which include solutions for video-based safety, vehicle telematics, apps and driver workflows, equipment monitoring, and site visibility. Our Data Platform also empowers developers via an open API and provides enhanced privacy and security features that are tailored to our Applications.
Our customers include small businesses, state and local governments, and large, global enterprises with complex operations involving thousands of physical assets. As of October 30, 2021, we had over 13,000 Core Customers, who are customers with subscriptions to our Connected Operations Cloud representing over $5,000 in annual recurring revenue (ARR)(1). And we believe there is still significant room for growth.
Unlike retail, advertising, media, and information technology, which have already undergone digital transformation, industries with physical operations are still in the early stages of digital adoption. Historically, the ability to connect their assets to the Internet has been limited by the physical nature of these industries. In addition, the cost and availability of sensors, compute capability, storage, video, and analytical processing have prevented widespread analysis of operations data. However, with advancements in IoT connectivity, cloud computing, video imagery, and AI, we believe industries that depend on physical operations are at the precipice of a massive wave of digital adoption. Samsara is enabling this transformation. We estimate that the total addressable market opportunity for our solution worldwide will be approximately $54.6 billion by the end of 2021, growing at a three-year overall compound annual growth rate of 21.0% to $96.9 billion by the end of 2024(2).
Our ability to capture, aggregate and analyze IoT data is our key differentiator. This allows us to turn IoT data into actionable business insights, which deliver significant value to our customers. Our Data Platform now collects over 2 trillion data points annually, including video footage, people and motion detection, GPS location, energy consumption, asset utilization, compliance logs, accelerometer and gyroscope data, and engine diagnostics. This immense data set powers our AI and provides our customers with actionable business insights that improve the safety, efficiency and sustainability of their operations. For example, we processed over 38 billion minutes of video footage in 2020, and our platform now makes over one billion AI-based detections annually. Our solution enables operations to achieve higher utilization of physical assets, reduced need for manual oversight and judgment, improved safety outcomes, lower insurance costs, fuel and electricity savings, emissions reductions, less unplanned downtime, efficiencies from routing and scheduling, minimized compliance costs, and automation of manual processes. Our Connected Operations Cloud benefits from powerful network effects. As more customers adopt our solution, we collect more data from a more diverse set of physical assets and software applications, thereby improving our machine learning models and generating better operational insights that make our Connected Operations Cloud more attractive to customers.
Customers typically adopt our solution to automate business processes and improve efficiencies throughout their organizations. By using Samsara’s Connected Operations Cloud, our customers are able to realize significant improvements in their operations that are reflected in their cost savings, improved safety and compliance records, and superior end-customer experience. These improvements can lead to improved profitability and durable revenue growth for our customers.
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Examples of how customers use and benefit from our Connected Operations Cloud include:
We were founded in 2015 and have achieved significant growth since our inception. For our fiscal years ended February 1, 2020 and January 30, 2021, our revenue was $119.9 million and $249.9 million, respectively, representing year-over-year growth of 108%. Our revenue for the nine months ended October 31, 2020 and October 30, 2021 was $174.0 million and $302.6 million, respectively, representing year-over-year growth of 74%. Our net loss was $225.2 million and $210.2 million for our fiscal years ended February 1, 2020 and January 30, 2021, respectively, and $174.0 million and $102.3 million for the nine months ended October 31, 2020 and October 30, 2021, respectively. We offer access to our Connected Operations Cloud on a subscription basis and price each subscription on a per asset, per application basis. In each of the last two fiscal years, we generated approximately 98% of our revenue from subscriptions to our Connected Operations Cloud. Our business model focuses on maximizing the lifetime value of our customer relationships and we continue to make significant investments in order to grow our customer base. We estimate that for fiscal year 2020, fiscal year 2021, and the fiscal quarter ended October 30, 2021, the calculated lifetime value of our customers has exceeded eight times the associated cost of acquiring them.
Industry Background
Digital transformation is an imperative for companies to compete. Those companies that successfully transform their businesses through modern applications, digital workflows, and intuitive user experiences often benefit from loyal customers, innovative offerings, and scalable business models that drive greater profitability. The proliferation of smart devices, growth in cloud applications, increasingly disparate user bases, and heightened customer expectations are together driving digital adoption. This transformation has already happened across many large industries. In the retail, advertising, media, and information technology industries, for example, innovative, digital-first entrants have disrupted older business models, fundamentally changing the way they operate.
Many industries that depend on physical operations, however, have been slower to adopt digital transformation. Despite their size and critical position in the worldwide economy, many companies in industries that depend on physical operations still largely rely on manual processes, siloed data, spreadsheets, and legacy software. These industries represent a massive, underpenetrated market for digital transformation.
The State of Physical Operations Today
Many operations-intensive businesses rely on high-value assets and equipment, deploy large field workforces that need coordination, manage complex logistics that require precision, and navigate industry-specific workflows that call for specialized knowledge. These businesses prioritize safety, efficiency and sustainability, while needing to adhere to a myriad of regulatory requirements. Businesses that depend on physical operations are in a unique position to leverage connected IoT assets to generate real-time operational data and deploy AI to drive insights, pursue automation, and improve efficiency in their business processes. For operations-intensive businesses to stay competitive and agile, there is an imperative to adopt digital technologies, and a significant business risk from complacency.
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Challenges with physical operations include:
The Rise of Connected Operations
Technological advances have made it possible for companies to visualize their operations digitally in the cloud in real time. These advances include:
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Our Solution
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We are helping drive the digital transformation of physical operations by enabling organizations with fleets, equipment, job sites, and mobile employees to connect real-time data from their physical operations on one platform. Our solution lets organizations capture data from our IoT devices and a growing ecosystem of connected assets and third-party systems so that they can access, analyze, and act on key insights to improve end-to-end operations. Our solution consists of our Connected Operations Cloud, together with a suite of easy-to-install, ruggedized IoT devices that capture data from offline assets and connect them to the cloud.
Our Connected Operations Cloud includes:
Key Applications of Our Connected Operations Cloud
We chose to start our journey in digitizing physical operations with connected fleets. Commercial vehicle fleets are the backbone of physical operations, and are required to deliver and transport services, goods, and people in industries including transportation, wholesale and retail trade, construction, field services, logistics, utilities and energy, government, healthcare and education, manufacturing, food and beverage, and others. These industries are ripe for transformation, with a breadth of available data and widespread reliance on antiquated, legacy technologies. Industries with commercial vehicle fleets face continued pressure to reduce costs and improve services, while simultaneously finding ways to overcome high accident rates, inefficient fuel consumption, and compliance burdens.
Our core Applications for connected fleets include:
Building on our experience in connected fleets, our industry-agnostic architecture and culture of innovation enabled us to add new data to our Connected Operations Cloud and develop new Applications across physical operations, including:
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These expansion Applications were driven by feedback from our customers who wanted to leverage our solution more broadly across their operations.
Benefits of Our Solution
Our solution provides the following benefits to our customers:
What Sets Us Apart
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2 trillion data points. This immense amount of data powers our AI platform. For example, using video and telematics data, we have been able to identify 20 million stop signs—the vast majority of which are not identified in publicly available mapping datasets. We can correlate this data with different data sets, such as customer driving behavior, and use AI to determine if drivers are rolling through stop signs or if traffic patterns in a city have changed. As we aggregate and analyze more data, the benefits of our Connected Operations Cloud increase.
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Our Team and Culture
Our culture is rooted in our values. Our values reflect what has always been core to who we are, and who we aspire to be as we drive our mission, build for the future, and grow our incredibly talented team. Our values are:
Our mission and culture are a competitive advantage for us in attracting and retaining top talent alongside recent accolades, including Forbes Cloud 100 (#19 in 2021), LinkedIn Top Startups (#4 in 2020), and the Financial Times America’s Fastest Growing Companies (#2 in 2021).
As of the last business day of the fiscal quarter ended October 30, 2021, we had 1,490 employees.
Our Market Opportunity
Our Connected Operations Cloud provides a digital hub for physical operations that we believe is addressing a large and rapidly growing market opportunity. We estimate our total addressable market opportunity to be approximately $54.6 billion by the end of 2021, growing at a three-year overall compound annual growth rate of approximately 21.0% to $96.9 billion by the end of 2024(4).
This opportunity consists of our current applications that include connected fleet, connected equipment and connected sites. Our connected fleet opportunity is represented by the global commercial telematics market, which, based on estimates provided by Gartner, we calculate to be a $32.9 billion market in 2021, growing to
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$63.7 billion in 2024. This calculation is based on Gartner’s forecasted market size of $98.8 billion in 2026 and forecasted compound annual growth rate of 25% for the market. Our connected equipment opportunity is represented by the trailer and cargo container tracking market, which Berg Insight estimates is a $1.8 billion market in 2021, growing at a compound annual growth rate of approximately 16.2% to $2.6 billion in 2024 (assuming a Euro to U.S. Dollar conversion rate of 1.00 EUR to 1.17 USD). And our connected sites opportunity is represented by the commercial global surveillance market, which IDC estimates is a $19.9 billion market in 2021, growing at a compound annual growth rate of approximately 15.3% to $30.6 billion in 2024.
We expect that our market opportunity will continue to grow as we expand the Applications we offer to serve our customers more broadly across their operations.
Growth Strategies
We intend to pursue the following growth strategies:
Risk Factors Summary
Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this prospectus summary. These risks include the following:
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Channels for Disclosure of Information
Investors, the media and others should note that, following the completion of this offering, we intend to announce material information to the public through filings with the Securities and Exchange Commission, or the SEC, the investor relations page on our website, press releases, public conference calls, webcasts and our corporate blog at www.samsara.com/blog/.
The information disclosed through the foregoing channels could be deemed to be material information. As such, we encourage investors, the media and others to follow the channels listed above and to review the information disclosed through such channels.
Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.
Corporate Information
We were incorporated in Delaware in 2015 as Samsara Networks Inc. and changed our name to Samsara Inc. in February 2021. Our principal executive offices are located at 350 Rhode Island Street, 4th Floor, South Building, San Francisco, California 94103, and our telephone number is (415) 985-2400. Our website address is www.samsara.com. Information contained on, or that can be accessed through, our website does not constitute part of this prospectus and inclusions of our website address in this prospectus are inactive textual references only. You should not consider information contained on our website to be part of this prospectus or in deciding whether to purchase shares of our Class A common stock.
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“Samsara,” our logo and our other registered or common law trademarks, service marks or trade names appearing in this prospectus are the property of Samsara Inc. or our subsidiaries. Other trademarks and trade names referred to in this prospectus are the property of their respective owners.
Implications of Being an Emerging Growth Company
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting requirements that are otherwise applicable generally to public companies. These reduced reporting requirements include:
We may take advantage of these provisions until we are no longer an emerging growth company. We would cease to be an “emerging growth company” upon the earliest to occur of: (i) the last day of the fiscal year in which we have greater than $1.07 billion in annual revenue; (ii) the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates; (iii) the date on which we have, in any three-year period, issued greater than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending after the fifth anniversary of this offering. We may choose to take advantage of some but not all of these reduced reporting burdens. We have taken advantage of certain reduced reporting burdens in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.
The JOBS Act permits an emerging growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to use this extended transition period until we are no longer an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
See the section titled “Risk Factors—Risks Related to Our Class A Common Stock and this Offering—We are an “emerging growth company” and our compliance with the reduced reporting and disclosure requirements applicable to “emerging growth companies” may make our Class A common stock less attractive to investors.”