2018 enterprise technology IPOs: Fall update
Editor's Note: This is the second part of CIO Dive's tech IPO tracking. Earlier this year, we rounded up the technology IPOs that took place between January and April. Check out how the first 10 IPOs performed and our analysis of the 2018 market kickoff here.
The late spring and summer months brought a new crop of IPOs. Six enterprise technology companies added their names to the list, concentrated in the fields of cybersecurity and software as a service (SaaS).
The year began with an eventful first four months of IPO activity that saw Dropbox (finally) go public, software dominating and high returns for technology companies reaping the rewards of a favorable market. Thus far, 26% of 2018 IPOs have been in the technology sector, according to Renaissance Capital.
Some hopes for IPOs were dashed, such as GitHub, acquired by Microsoft in June; AlienVault, acquired by AT&T in July; or Dell, which decided to buy $21.7 billion in VMware tracking stock in July and become a publicly traded company without going through the IPO process again.
As the enterprise waits to see what the last four months of the year will bring, the new class of public business technology companies will bear the changing fall colors. In order of debut, here are the six companies that went public between May and August:
1. Carbon Black (CBLK)
Type: Endpoint security software
Headquartered: Waltham, Massachusetts
CEO: Patrick Morley
Competitors: Cylance, Symantec, CrowdStrike, McAfee
Trade date: May 4, 2018
The company closed its trading day up 26% with shares surging from the listed price of $19 to $23.94. After some fluctuations in the last four months, Carbon Black's stock has settled close to its trading day price, bringing the company's valuation close to $1.7 billion — though Carbon Black sees a $19 billion potential market opportunity moving forward.
Along with March's Zscaler IPO, Carbon Black is one of the biggest and most anticipated cybersecurity companies to go public in 2018 with a portfolio focusing on the application of big data and analytics in the cloud to cybersecurity. The company's customer base grew at a 45% CAGR from 2015 to 2017 and is put to use by more than 3,700 customers and 33 of the Fortune 100, according to the company's prospectus.
2. PluralSight (PS)
Type: SaaS, enterprise technology learning platform
Headquartered: Farmington, Utah
CEO: Aaron Skonnard
Competitors: Lynda, Udacity, Udemy
Trade date: May 17, 2018
PluralSight went public to a 35% increase in share price, with Founder, CEO and Chairman Aaron Skonnard retaining control with 54.6% of voting power of his company. Part of the $310 million netted from the IPO will help the company pay down its debts.
In the months since its IPO, the company's stock price and value have steadily risen. After closing its trade date at $20 a share, the company has comfortably sat at over $30 a share for close to a month, bringing its market cap to more than $4.7 billion.
3. Avalara (AVLR)
Type: SaaS, tax compliance solutions
Headquartered: Seattle, Washington
CEO: Scott McFarlane
Competitors: TaxJar, SpeedTax, Sovos Compliance
Trade date: June 15, 2018
After pricing its shares above expectations, the tax compliance software unicorn closed its trading day with an 85% pop to a share price just under $45. But the three months following have seen the company stock price lower to hover around the high $30s to low $40s, bringing the company's market cap to more than $2.6 billion.
Aided by an increasingly complex tax compliance landscape, Avalara's subscription products help customers automate taxation processes. The company's cloud-based solutions offer integrations with business applications from leading providers such as Microsoft, Salesforce and Netsuite.
4. Domo (DOMO)
Type: SaaS, analytics and business intelligence
Headquartered: American Fork, Utah
CEO: Josh James
Competitors: MicroStrategy, Looker, Microsoft Power BI
Trade date: June 29, 2018
After gaining 30% on its public debut to close at $27.30, Domo's share price steadily fell through July to a low around $16. The company slowly climbed back up through August, pricing in at a little over $21 to a $527.8 million market cap.
Ahead of its IPO it lost its unicorn status, slashing its value down to around $511.6 million. One of the smaller technology companies to go public this year, Domo also raised some concerns among investors because of growing deficits, reports CNBC.
5. Tenable (TENB)
Type: Cybersecurity exposure
Headquartered: Columbia, Maryland
CEO: Amit Yoran
Competitors: Qualys, Rapid7, Nessus
Trade date: July 26, 2018
The company closed Day 1 as a publicly traded company up 31.5%, adding close to a quarter of a million dollars to its valuation after filing to go public in late June. More than a month since its trade date, Tenable's value has increased almost 10%, reaching a market cap of more than $3 billion.
The company previously disclosed that it had over 24,000 customers, including 53% of Fortune 500 companies. Tenable's SaaS product offers a "Cyber Exposure Command Center" for CISOs to increase visibility in their security.
6. Safe-T Group (SFET)
Type: Data security solutions
Headquartered: Ramat Gan, Israel
CEO: Shachar Daniel
Competitors: Zscaler, Akamai, Vidder
Trade date: August 17, 2018
Among the smallest enterprise technology IPOs to list this year, the Israel-based company's U.S. IPO opened below its initial price of $14.35 per share and closed the day at $11. After a month of fluctuations, it has resettled at this price with a market cap around $15.8 million.
Among the "untraditional IPOs" listing in the U.S. in 2018 as investor capital continues to pour, the foreign company demonstrates that the "window for small-cap stocks is officially busted wide open," according to Seeking Alpha's Gary Alexander.
Keep an eye out
There's still four months left in the year, and analysts are expecting the active IPO market to continue, potentially breaking 200 IPOs by year's end — a feat only accomplished twice in the last 10 years, according to Renaissance Capital.
In the cybersecurity space, network security company Cloudflare hired the former CFO of Symantec this summer as it readies for its public offering. CrowdStrike, Cylance, Tanium, Lookout and Illumio are also well poised for, and many reportedly mulling, an IPO.
In other enterprise technology markets, London-based technology services provider Endava is looking at a $101 million U.S. IPO, according to an SEC filing in July. Search software company Elastic filed its prospectus on Wednesday, and SurveyMonkey filed with the SEC last Wednesday.
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