Raspberry Pi debuts with 38% stock surge

Raspberry Pi debuts with 38% stock surge

Raspberry Surge

Raspberry Pi, the renowned maker of tiny single-board computers, made its debut on the London Stock Exchange with a remarkable 38% surge in stock price. The company priced its shares at 280 pence each, and by the close of trading on the first day of “conditional dealing,” a special trading period for certain investors, the shares had risen to 388 pence. The initial public offering aims to raise £166 million ($211.2 million), marking a significant event for London’s stock market, which has struggled to attract high-profile tech IPOs in recent times.

Based on the initial pricing, Raspberry Pi’s market valuation reached around £541.6 million. The offering consists of 45.9 million ordinary shares sold by the company’s majority shareholder, Raspberry Pi Mid Co Limited, a subsidiary of the Raspberry Pi Foundation. Additionally, 2.13 million shares were sold by other shareholders, and 11.23 million new shares were issued.

An overallotment option allows the Raspberry Pi Foundation to issue an additional 4.6 million shares if demand exceeds expectations, potentially raising the total offer size to £178.9 million. Eben Upton, CEO and founder of Raspberry Pi, established the company in 2012 with the mission of making computing accessible to young people. While initially popular among hobbyists, the company reports that 72% of its sales now target the industrial market, where its devices are used in various applications, including factories.

In 2023, Raspberry Pi reported $265.8 million in revenue, a 41% increase from the previous year. The company has garnered support from major industry players like Arm and Sony.

Raspberry Pi shares soar on debut

Notably, Sony Semiconductor Solutions, a subsidiary of Sony Corporation, invested an undisclosed amount in Raspberry Pi last year. Though smaller than many of its tech counterparts, Raspberry Pi’s IPO is seen as a potential revitalizer for the London Stock Exchange, which has been overlooked by other technology firms favoring listings in the U.S. and other European markets. However, some hobbyists and enthusiasts have expressed concerns about the company’s future direction following the IPO.

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They fear that the company’s growing interest in commercialization may lead it further away from its hobbyist roots. Raspberry Pi’s intention to float document makes it clear that the company recognizes the significant revenue potential in catering to industrial and embedded customers, which accounted for 72% of the 7.4 million single-board computers and modules sold last year. The company estimates the total addressable market for this side of the business at $16.3 billion in 2023, compared to $4.9 billion for other areas, including education and hobby.

Despite these concerns, Eben Upton has argued that Raspberry Pi will not lose sight of hobbyists post-IPO. The company’s document refers to enthusiast and education customers as “the ‘heart’ of the Raspberry Pi movement,” and it pledges to continue releasing new Raspberry Pi models every three to four years, along with new product variants and more first-party accessories. The IPO will shift Raspberry Pi’s corporate structure, with the non-profit Raspberry Pi Foundation selling up to 10% of its shares to establish an endowment, making it less dependent on Raspberry Pi’s commercial success for funding.

While catering to individual users may not be the company’s top priority, Raspberry Pi’s strong software support, extensive documentation, and enthusiastic community are seen as key components of its defense against competitors. As Raspberry Pi embarks on this new chapter, fans remain cautiously optimistic, hoping that the company will strike a balance between its commercial aspirations and its commitment to the hobbyist community that has been at the core of its success.

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