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February 5, 2020
Brent Bellm
President and Chief Executive Officer
BigCommerce Holdings, Inc.
11305 Four Points Drive
Building II, Third Floor
Austin, TX 78726
Re: BigCommerce Holdings, Inc.
Draft Registration Statement on Form S-1
Submitted January 9, 2020
CIK No. 0001626450
Dear Mr. Bellm:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1
Prospectus Summary
Overview, page 1
1. You refer to your annual revenue run-rate ("ARR") for the periods
presented here and
throughout the prospectus. Please define the ARR metric here or provide
a cross-
reference to such disclosure.
Market Size and Opportunity, page 4
2. You state that you believe your total addressable market is materially
larger than
ecommerce platform spend due to the additional revenue share that you
earn from your
Brent Bellm
FirstName LastNameBrent Bellm
BigCommerce Holdings, Inc.
Comapany NameBigCommerce Holdings, Inc.
February 5, 2020
February 5, 2020 Page 2
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FirstName LastName
technology partner ecosystem. As the estimate of market opportunity
for ecommerce
platforms appears to include spend on both software-as-a-service
("SaaS") and legacy
software, please also discuss the effect that the continued strength
of legacy software may
have on such estimate. In this regard, we note your disclosure that
legacy software is still
prevalent for the largest retail businesses and that only within the
last five years have
multiple SaaS options begun to challenge legacy software leaders in
the small, mid-
market, and large enterprise segments. Also, while we note your
discussion of the
disadvantages of legacy software throughout the prospectus, please
address whether there
are any material risks and challenges that legacy software has posed,
or is expected
to continue to pose, to your business. In this regard, the first risk
factor on page 35
suggests that the challenge of converting businesses from legacy
software to SaaS is
magnified in the case of highly regulated industries.
Our solution, page 6
3. Please provide support for the assertion that you are the leading open
SaaS platform for
cross-channel commerce.
Risk Factors
Our success depends in part on our partner-centric . . ., page 21
4. You disclose that certain of your strategic technology partners,
including PayPal, Google,
and Stripe, generate significant revenue for you. In this regard, we
also note your
disclosure in Note 2 to the financial statements on page F-11 that one
partner represented
12% of your revenue for the fiscal year ended December 31, 2018. To
the extent that any
particular partner has continued to represent a significant portion of
your total revenue and
the loss of such partner would have a material adverse effect on your
business, please
enhance this risk factor by highlighting that fact and specifying the
partner from which
you derive that revenue, and describe the material terms of the
contract governing such
relationship. Also, please clarify whether your contracts with
strategic technology
partners are cancelable.
Risks related to owning our Series 1 common stock and this offering, page 41
5. Please address in a risk factor the extent to which your directors,
executive officers, and
persons holding more than five percent of the outstanding shares of
Series 1 common
stock will be able to exercise significant influence over any vote of
the Series 1
stockholders after the offering, as well as the anti-takeover
implications of such
concentration. Also, disclose the percentage of the Series 1 common
stock that they will
together beneficially own following the offering in the prospectus
summary.
Brent Bellm
FirstName LastNameBrent Bellm
BigCommerce Holdings, Inc.
Comapany NameBigCommerce Holdings, Inc.
February 5, 2020
February 5, 2020 Page 3
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FirstName LastName
The provision of our amended and restated certificate of incorporation
requiring . . ., page 47
6. You state that the exclusive forum provision will not apply to suits
brought to enforce a
duty or liability created by the Securities Act of 1933 or the
Securities Exchange Act of
1934. The corresponding disclosure on page 125, however, indicates
that the provision
will require that claims arising under the federal securities laws
must be brought in a state
or federal court located within the State of Delaware. Please revise
to reconcile these
disclosures and clarify whether the exclusive forum provision will
apply to claims arising
under the federal securities laws in any manner. If the provision will
apply to claims
arising under the federal securities laws, state that there is
uncertainty as to whether a
court would enforce such provision and that investors cannot waive
compliance with the
federal securities laws and the rules and regulations thereunder. If
the provision will not
apply to claims arising under the federal securities laws, please also
ensure that the
provision states this clearly, or tell us how you will inform
investors in future filings that
the provision does not apply to any claims arising under the federal
securities laws.
Market, Industry, and Other Data, page 49
7. We note that you cite estimates and statistics from a number of
third-party publications
and reports throughout the prospectus. In addition to identifying the
third parties, please
provide the name and date of each publication or report that you
reference.
Use of Proceeds, page 50
8. Please identify any executive officer, director or any of their
affiliates who will be
receiving offering proceeds pursuant to the Series F Dividend, and
quantify the amount
each will receive. Provide this disclosure in the aggregate under the
summary of the
offering on page 12.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Overview, page 60
9. You disclose here and throughout the prospectus that the 60,000 online
stores that you
serve represents your customer base. As your customers may have
multiple stores
running on your platform and your growth strategy is dependent in part
on selling
additional stores to existing customers, please contextualize this
disclosure by providing
the number of businesses and stores on your platform for each period
presented. Also,
given your particular focus on acquiring, retaining, and growing your
mid-market and
large enterprise customer base and the fact that the increase in the
number of mid-market
and large enterprise customers has been one of the primary
contributors to your revenue
growth, please break out such information by type of business. In this
regard, we note the
growth in your mid-market and large enterprise customer base is not
clear because your
accounts with annual contract value ("ACV") greater than $2,000 metric
includes not only
customers on Enterprise plans but also customers on Pro plans and
customers with
multiple plans that together exceed such threshold. Finally, in light
of the strategic
Brent Bellm
FirstName LastNameBrent Bellm
BigCommerce Holdings, Inc.
Comapany NameBigCommerce Holdings, Inc.
February 5, 2020
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February 5, 2020 Page 4
FirstName LastName
importance of large enterprises to your business and your statement
that the power of your
platform to support their growth better than legacy software is
"evidenced by the large and
growing number of category leaders and Global 2000 businesses that
select you as their
ecommerce platform of choice," please also specify the number of large
enterprise
businesses and stores on your platform for each period presented.
Key factors affecting our performance, page 63
10. Please discuss whether there are any material challenges related to
retaining and growing
your existing customers that you have faced or expect to continue to
face. In this regard,
we note that growth in subscription solutions revenue in fiscal year
2019 appears to have
been primarily driven by the acquisition of new customers. Further, we
note your net
revenue retention has fluctuated between negative and positive rates
for the periods
presented. For additional context, please also disclose the average
fixed term of your
existing non-cancelable enterprise contracts.
Key business metrics, page 63
11. In your explanation of the computation of annual revenue run-rate, you
indicate that
monthly recurring revenue includes contractual growth adjustments as
customers'
businesses grow past contracted order thresholds. Please clarify
whether you include the
actual adjusted fees once the customers' business has reached the
threshold or an
estimated amount.
12. In your explanation of the computation of average revenue per account
for accounts above
the ACV threshold, please clarify the period you use to determine the
amount of
customer-billed revenue and the allocated amount of partner and
services revenue
included in the calculation.
13. Please provide an analysis explaining how changes in your key business
metrics
correspond to changes in revenues for the periods presented. For
example, address the
decrease in both the number and the net retention rate of accounts
with ACV greater than
$2,000 as of June 30, 2018 compared to March 31, 2018. Refer to the
Instructions to Item
303(a) of Regulation S-K.
14. You disclose the percentage of your ARR generated from accounts with
greater than
$2,000 ACV for each period presented. Please also disclose the
percentage of ARR
generated from customers on your Enterprise plan for each period
presented. In this
regard, we note that as of December 31, 2019, such customers generated
"approximately
half" of your ARR.
Liquidity and capital resources, page 72
15. You state that you believe the net proceeds received from this
offering will be sufficient to
meet your working capital and capital expenditure needs and your debt
service obligations
for at least the next 12 months. As it appears that you have
identified a material liquidity
Brent Bellm
BigCommerce Holdings, Inc.
February 5, 2020
Page 5
deficiency and continue to have substantial doubt as to your ability to
continue as a going
concern, please disclose the minimum period of time that currently
available capital
resources will allow you to conduct planned operations and satisfy your
obligations, as
well as the minimum dollar amount of funding required to remain in
business for at least
the next 12 months. Also, highlight this risk in a separately captioned
risk factor. Refer
to Item 303(a)(1) and (2) of Regulation S-K and Section IV of SEC
Release No. 33-8350.
Notes to Consolidated Financial Statements
Note 2. Summary of significant accounting policies
Revenue recognition, page F-11
16. We note from your disclosure in the second to last paragraph on page 64
that you
generally recognize revenue for enterprise contracts ratably over the
term of the contract
by estimating the total consideration to be received over the contract
term. Please disclose
the methods, inputs, and assumptions used in estimating the transaction
price for
enterprise contracts. Refer to ASC 606-10-50-20.
Note 9. Stockholders' equity (deficit)
Preferred stock, page F-23
17. Please revise to disclose the number of shares into which your preferred
stock is
convertible into at the balance sheet date. Refer to ASC 505-10-50-6(b).
General
18. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to do
so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
You may contact Melissa Walsh, Staff Accountant, at (202) 551-6515 or
Stephen
Krikorian, Accounting Branch Chief, at (202) 551-3488 if you have questions
regarding
comments on the financial statements and related matters. Please contact
Bernard Nolan,
Attorney-Adviser, at (202) 551-6515 or, in his absence, Kathleen Krebs, Special
Counsel, at
(202) 551-3350 with any other questions.
Sincerely,
FirstName LastNameBrent Bellm
Division of
Corporation Finance
Comapany NameBigCommerce Holdings, Inc.
Office of
Technology
February 5, 2020 Page 5
cc: Samer M. Zabaneh
FirstName LastName