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CORRESP
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filename1.htm

CORRESP

 53rd at Third

 885 Third Avenue

New York, New York 10022-4834

 Tel: +1.212.906.1200 Fax:
+1.212.751.4864

 www.lw.com

FIRM / AFFILIATE OFFICES

Barcelona

Moscow

Beijing

Munich

Boston

New York

Brussels

Orange County

October 24, 2017

Century City

Paris

Chicago

Riyadh

Dubai

Rome

Düsseldorf

San Diego

Frankfurt

San Francisco

Hamburg

Seoul

Hong Kong

Shanghai

Houston

Silicon Valley

 London

 Los Angeles

Madrid

 Milan

 Singapore

 Tokyo

Washington, D.C.

VIA EDGAR AND HAND DELIVERY

 Barbara C. Jacobs

 Assistant Director

Office of Information Technologies and Services

 United States
Securities and Exchange Commission

 100 F Street, N.E.

Washington, D.C. 20549

 Bandwidth Inc. is requesting confidential treatment
pursuant to Rule 83 of the Commission’s Rules on Information Requests, 17 C.F.R. Section 200.83, with respect to certain confidential information that has been omitted from this letter. This letter is being provided to the Staff in its
entirety, with redacted portions highlighted, in hard copy under separate cover along with the request for confidential treatment.

Re:
Bandwidth Inc.

 Registration Statement on Form
S-1

 Filed October 13, 2017

File No.: 333-220945

Dear Ms. Jacobs:

 Reference is hereby made
to the above-captioned Registration Statement on Form S-1, as amended (the “Registration Statement”), of Bandwidth Inc., a Delaware corporation (the “Company”),
in connection with the offering (the “Offering”) of shares of Class A common stock, par value $0.001 per share (the “Class A common stock”), by the Company and the
selling stockholders named therein.

 The Company is providing the staff (the “Staff”) of the Securities and
Exchange Commission (the “Commission”) with a supplemental submission regarding the difference between the potential high-end of the Preliminary Price Range (as defined below) for the
Class A common stock being sold in the Offering and (i) the fair market value of the Class A common stock at the time of grants of stock-based compensation and (ii) and the fair market value of the Class B common stock at
the time of issuance of warrants, in each case, made by the Company since September 1, 2016 (the “Reference Date”). Unless otherwise indicated, capitalized terms used herein have the meanings assigned to them in the
Registration Statement.

 [***] Certain information in this document has been omitted and provided separately with
the Securities and Exchange

 Commission. Confidential treatment has been requested with respect to such portions of this letter.

 October 24, 2017

 Page
 2

 Preliminary IPO Price Range

The Company supplementally advises the Staff that, while not reflected in the Registration Statement, based on discussions with the
Company’s board of directors and reflecting the input from the lead underwriters (the “Underwriters”) for the Company’s initial public offering (“IPO”), if the Company were to commence
marketing of the transaction today, the Company presently anticipates that the estimated high-end of the price range would be approximately $[***] to $[***] per share for the Company’s Class A common
stock (the “Preliminary Price Range”). The Company’s final Preliminary Price Range remains under discussion between the Company and the Underwriters and a bona fide price range will be included in an amendment to the
Registration Statement prior to any distribution of the preliminary prospectus in connection with the Company’s road show.

 Equity Grants in
Preceding 12 Months

 As described in detail in the Registration Statement, the Company is expected to file its second amended and
restated certificate of incorporation immediately prior to pricing of the IPO, pursuant to which, (i) shares of the Company’s Old Class B common stock (and options exercisable into Old Class B common stock) will become shares of
(and options exercisable into) the Company’s Class A common stock, and (ii) shares of the Company’s Old Class A common stock (and options and warrants exercisable into Old Class A common stock) will become shares of
(and options and warrants exercisable into) the Company’s Class B common stock. Accordingly, the discussion below assumes that the second amended and restated certificate of incorporation is effective. Furthermore, the tables below present
the number of shares of common stock and exercise prices on an as-adjusted basis for the 2.50-for-1 stock split (the
“common stock split”) that the Company effectuated on October 23, 2017.

 The tables below itemize
(i) all stock options exercisable into Class A common stock granted by the Company since the Reference Date and (ii) all warrants issued by the Company exercisable into Class B common stock since the Reference Date. On
November 30, 2016, the Company completed a pro-rata distribution of the common stock of Republic Wireless to the Company’s shareholders of record in a tax-free
spin-off (the “Republic Wireless Spin-Off”). The Republic Wireless Spin-off resulted in the issuance to
all of the Company’s optionholders and warrantholders of (i) options and warrants in Republic Wireless, as applicable (the “Republic Wireless Options and Warrants”), and (ii) an adjustment to the exercise price
of (a) all of the Company’s outstanding stock options and warrants to preserve the intrinsic value (or “in the money” value) of the Company’s outstanding stock options and warrants and (b) the Republic Wireless Options
and Warrants. The adjustment, based upon independent third-party valuations prepared by a third-party valuation firm, allocated approximately 56.5935% of the value to the Company and the balance to Republic Wireless.

 [***] Certain information in this document has been omitted and provided separately with
the Securities and Exchange

 Commission. Confidential treatment has been requested with respect to such portions of this letter.

 October 24, 2017

 Page
 3

 Stock Option Grants

 Grant

date

Adjusted
exercise
price

Shares of
Class A
common
stock

Adjusted fair
market value
per share of
Class A
common
stock

Total
compensation
expense
(as measured)

Compensation
expense per
share of Class A
common stock

Percent of
total grants
since
Reference
Date

 9/1/2016

$
9.568

32,125

$
9.568

$
129,401

$
4.03

11.5
%

 11/3/2016

$
9.568

41,937

$
9.568

$
169,792

$
4.05

15.0
%

 11/23/2016

$
9.596

25,625

$
9.596

$
106,003

$
4.14

9.2
%

 1/31/2017

$
9.596

38,412

$
9.596

$
166,206

$
4.33

13.7
%

 3/9/2017*

$
9.596

37,500

$
9.596

$
163,650

$
4.36

13.4
%

 5/22/2017

$
9.596

18,390

$
9.596

$
79,149

$
4.30

6.6
%

 8/24/2017

$
18.40

85,625

$
18.40

$
705,755

$
8.24

30.6
%

*
Does not include the impact of a modification to 25,000 options granted on March 9, 2017. On September 1, 2017, the Company immediately vested these options as a result of a severance
agreement. The Company recognized additional expense of $230,485 ($9.2194 per share) for the quarter ending September 30, 2017 as a result of the modification.

Warrant Issuances

 Issuance

date

Adjusted
exercise
price

Shares of
Class B
common
stock

Adjusted fair
market value per
share of Class B
common stock

Total compensation
expense

Percent of
issuances since
Reference Date

 10/19/2017

$
6.572

4,531

$
18.912

—

100.0
%

 Following the August 24, 2017 stock option grant listed above, there were no additional stock options
that were granted through the date hereof and no additional grants are expected until the completion of the IPO. With respect to the warrants, prior to the warrants issued on October 19, 2017, there had been no warrants issued since
June 15, 2012. Additionally, no additional warrants are expected to be issued going forward.

 Background

In accordance with the Financial Accounting Standards Board’s authoritative guidance on stock compensation, the Company records each of
its option grants at fair market value. The fair market value of the Class A common stock that underlies the Company’s common stock options was determined and approved by the Company’s Board of Directors (the
“Board”) based upon information available at the time of the grant. The fair market value of the Class B common stock that underlies the Company’s warrants issued on October 19, 2017 was not considered by the
Board because the Company issued the warrants pursuant to pre-existing contractual obligations with the recipients of the warrants as further described below. For purposes of the stock option awards in the
table above, the Board considered independent third-party valuation reports prepared by a third-party valuation firm for the fair market value of the Class A common stock and the Class B common stock as of November 30, 2016 and
June 30, 2017. These reports applied customary valuation methodologies as more fully described below, including the application of a discount for a lack of marketability. Because there has been no public market for either of the classes of
common stock, the Board has determined the fair market value of the Company’s common stock based on the valuation reports, as well as an analysis of other key relevant factors, including the following:

 [***] Certain information in this document has been omitted and filed separately with the
Securities and Exchange

 Commission. Confidential treatment has been requested with respect to omitted information.

 October 24, 2017

 Page
 4

•

the assets and liabilities of the Company;

•

the income (loss) from the Company’s operations;

•

the growth of the Company’s revenues and income;

•

the valuation of other comparable businesses; and

•

recent sales of the Company’s Old Class A common stock and the rights, privileges and preferences of the Company’s Series A preferred stock.

Third Party Valuations

 On April 19,
2016, the Company obtained a third-party valuation of the fair market value of the Class A common stock and the Class B common stock of the Company as of December 31, 2015 (the “December 2015 Valuation”). The
December 2015 Valuation included Republic Wireless because the Republic Wireless Spin-Off did not occur until December 1, 2016. On December 1, 2016, the Company obtained a third-party valuation of
the fair market value of the Class A common stock and the Class B common stock of the Company as of December 1, 2016 (the “December 2016 Spin-Off Valuation”). On
April 19, 2017, the Company obtained a third-party valuation of the fair market value of the Class A common stock and the Class B common stock of the Company as of November 30, 2016 (the “December 2016
Valuation”), which valuation did not reflect any material changes to the December 2016 Spin-Off Valuation. On August 14, 2017, the Company obtained a third-party valuation of the fair market
value of the Class A common stock and the Class B common stock of the Company as of June 30, 2017 (the “June 2017 Valuation”). The December 2015 Valuation, the December 2016
Spin-Off Valuation, the December 2016 Valuation and the June 2017 Valuation each used the income approach and the market approach to estimate fair market value. An additional consideration in connection with
the June 2017 valuation was related to the Company’s then-recent determination to potentially pursue strategic financing through an IPO. As a result, in June 2017, the Company began using the probability-weighted expected return method in order
to value the Company’s common stock assuming possible various future events for the Company, including an initial public offering and a scenario in which the Company would continue as a privately held company.

Income Approach. The income approach attempts to value an asset or security by estimating the present value of the future economic
benefits it is expected to produce. The benefit of this approach is that it can include earnings, cost savings, tax deductions and disposition proceeds from the asset. The most commonly employed income approach to valuation is the discounted cash
flow analysis, which is what was employed for the December 2015 Valuation, the December 2016 Spin-Off Valuation, the December 2016 Valuation and the June 2017 Valuation. An indication of value may be developed
when utilizing the discounted

 [***] Certain information in this document has been omitted and provided separately with
the Securities and Exchange

 Commission. Confidential treatment has been requested with respect to such portions of this letter.

 October 24, 2017

 Page
 5

cash flow approach by discounting the expected future cash generating capacity of the Company to its present value at a rate of return that incorporates (i) the risk-free rate for the use of
funds and (ii) a risk premium related both to the market more broadly, as well as specific to the company. An additional factor that the Company’s third-party valuation firm considered when calculating the Company’s value based on the
discounted cash flow approach was the lack of marketability for the Company’s shares of common stock due to there not being a public market for such shares of common stock. Based on the discounted cash flow analysis, the fair market value of
the Company was $281.6 million in the December 2015 Valuation, $136.3 million in the December 2016 Spin-Off Valuation and the December 2016 Valuation and $135.3 million in the June 2017
Valuation.

 Market Approach. The market approach attempts to value an asset or security by examining observable market values for
similar assets or securities. The guideline public company method and the guideline transaction method were employed for the December 2015 Valuation, the December 2016 Spin-Off Valuation, the December 2016
Valuation and the June 2017 Valuation.

 The guideline public company method is based upon the premise that indications of value for a
given entity can be estimated based upon the observed valuation multiples of comparable public companies, the equity of which is freely-traded by investors in the public securities markets. The first step in such an analysis involves the selection
of a peer group of companies from which it is believed relevant data can be obtained. The second step involves the calculation of the relevant valuation multiple or multiples for each company in the peer group. The final step involves the selection
and application of the appropriate multiples to the relevant financial metrics of the subject company. Depending upon the nature of the multiple, the resulting value indication may be adjusted for assets not reflected in the specific multiple(s)
applied and also discounted due to the lack of marketability of the shares of the company for which the study is being performed. Based on the guideline public company method, the fair market value of the Company was (i) $289.8 million for the
December 2015 Valuation (based on $210.3 million attributable to the Company and $79.4 million attributable to Republic Wireless), but reduced to $274.7 million after adjustment for a working capital shortfall; (ii) between
$139.1 million and $350.1 million, depending upon the application of revenue or EBITDA multiples, for the December 2016 Spin-Off Valuation and the December 2016 Valuation; and (iii) between
$158.9 million and $400.5 million, depending upon the application of revenue or EBITDA multiples, for the June 2017 Valuation.

The guideline transaction method is based upon the premise that indications of value for a given entity can be estimated based upon the
valuation multiples implied by transactions involving companies that are comparable to the subject entity. The first step in such an analysis involves the identification of transactions from which it is believed relevant data can be obtained. The
second step involves the calculation of the relevant valuation multiple or multiples for each transaction in the comparable group. The final step involves the selection and application of the appropriate multiples to the relevant financial metrics
of the subject c