Enterprise software sees another strong IPO with Utah unicorn PluralSight
- PluralSight, an enterprise software company dedicated to shrinking the technology skills gap, went public on Thursday, trading 20.7 million shares. The Utah unicorn saw a 35% increase in share price, which was listed at $15 and closed the day at more than $20.
- The company will net $310.5 million from the IPO and plans to use some of the proceeds to pay down its debt, reports Reuters.
- Aaron Skonnard, PluralSight co-founder, chairman and CEO, retains control of the company with 54.6% of voting power through capital stock, according to the company's prospectus.
PluralSight joins a growing list of enterprise technology companies that made a public debut in 2018, with enterprise software dominating.
Recently, enterprise software companies have found tremendous success disrupting specific parts of business technology, rather than going as one-size-fits-all models, according to Rick Kline, partner and co-chair of Goodwin's Capital Markets Practice and Technology Practice member, in an interview with CIO Dive. So instead of large deployments from Cisco or Oracle's NetSuite changing the space, now companies like Atlassian are disrupting business technology.
Healthy trading multiples and a large appetite from public equity investors for technology IPOs have led a strong wave of tech activity in the market in the last few months, and companies that are already public have been trading at high levels compared to their historical average, according to Brad Weber, partner in Goodwin's Technology Companies and Capital Markets practice groups, in an interview with CIO Dive.
Strong market performance and entrance appears sustainable, barring a macro event that might make investors lose confidence in the market, such as an international powder keg igniting or interest rates running up more quickly, according to Kline
The process to go public takes a minimum of four months, and more technology companies have gotten the ball rolling on public offerings and could come out of the woodwork in Q3 or Q4. But with the SEC having granted the ability to do required paperwork and start discussions confidentially, knowing just how many companies are in the pipeline is a lot of guesswork, according to Weber.
On the one hand, this makes it difficult to assess the market in coming months and see what competitors are gearing up for. But beginning the process of going public confidentially allows a company to get preparations underway without a formal or informal commitment brought on by public awareness, according to Weber.
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