Software dominates the 10 technology IPOs of 2018
The first quarter is over, most earnings are in and the market is looking good for initial public offerings for technology companies.
Last quarter, 10 tech companies went public and, once again, raised more than double the proceeds compared to other sectors, according to Renaissance Capital. And good times rolled into the start of Q2 with four IPOs the last full week of April.
A third of the way into 2018 and there are already twice as many technology companies that went public compared to the same time last year, reports Recode.
Enterprise, cloud-based software companies are dominating, with a few nods to security along the way. Software to get on the cloud, develop in the cloud and run operations on the cloud are hitting it off in the enterprise, and for the most part companies supplying these products and services have seen very successful IPOs, outpacing other industries in number of deals made, average returns and total proceeds.
As the world waits to see how unicorns Uber and Airbnb will perform in their IPOs in 2019, there's still 8 months to go and plenty more IPOs underway, potentially including the likes of SurveyMonkey and Domo.
In order of debut, here are the 10 enterprise technology companies that went public in the first third of 2018, plus one set to go public this week:
1. One Stop Systems (OSS)
Type: High performance computing hardware and appliances
Headquartered: Escondido, California
CEO: Steve Cooper
Trade date: Feb. 1, 2018
One Stop Systems kicked off IPOs for the year without much excitement, closing below its offer price, according to a company announcement. The 20-year-old company is one of the oldest to go public so far and, having survived two recessions and wave after wave of new technologies, is a good reminder that being the tortoise in a race doesn't have to be a bad thing. Today the company dabbles in advanced AI applications and systems design, bolstering the hardware demands for ultra-fast processing.
2. Cardlytics (CDLX)
Type: Purchase intelligence platform
CEO: Scott Grimes
Trade date: Feb. 9, 2018
Cardlytics closed the day just over its IPO price, despite jumping into a market thrown into turbulence by an S&P 500 correction. The company's leadership doubled down on high-quality investors instead of considering a delay in going public, reports MarketWatch. The advertising tech is going up against the industry behemoth Google Adwords, and has already established partnerships with big companies such as Bank of America.
3. Zscaler (ZS)
Type: Cloud-based security services
Headquartered: San Jose, California
CEO: Jagtar Chaudhry
Trade date: March 16, 2018
Zscaler decoupled network and application access to put users at the center of security, accommodating the technological shift away from the data center, and the model paid off. The company closed its first public day trading 106% above opening price, reaching a $3.87 billion market cap.
4. Dropbox (DBX)
Type: Collaboration and storage
Headquartered: San Francisco, California
CEO: Drew Houston
Trade date: March 23, 2018
After years of speculation, Dropbox finally went public last month, with shares up almost 36% by the time the market closed. Ahead of its IPO, the cloud-based company inked many enterprise deals to round out its portfolio and customer base, including a Salesforce integration to tackle vertical industries.
5. Zuora (ZUO)
Type: Software for subscription-based businesses
Headquartered: San Mateo, California
CEO: Tien Tzuo
Trade date: April 12, 2018
The first business technology startup to debut after Dropbox, Zuora had big shoes to step into but continued the pattern and pulled off a very successful entrance to the market, closing more than 40% over the IPO price, reports Seeking Alpha. The ERP provider has hit it with some big clients like Box, TripAdvisor and Nvidia, but it still has a lot of competition ahead against established market leads like Microsoft, SAP and Oracle.
6. Pivotal Software (PVTL)
Type: Cloud software and services
Headquartered: San Francisco
CEO: Rob Mee
Trade date: April 20, 2018
The youngest technology company to go public this year, Pivotal Software is a spinoff of Dell EMC and gained 5% in its IPO, reports Seeking Alpha. It joins the train of cloud software companies hitting success in the IPO market. Even with the IPO, Dell retains control over the company with 70% of stock, reports MarketWatch. The company combines the Pivotal Cloud Foundry, a cloud-native platform for development to help customers build, deploy and maintain cloud software and applications.
7. Ceridian HCM (CDAY)
Type: HR software and services
CEO: David Ossip
Trade date: April 26, 2018
Ceridian kicked off one of the busiest weeks for technology IPOs the market has seen in years with appropriate excitement, with shares closing up 42%. But with single-digit revenue growth and a gross margin below 40%, the company still has some proving to do in the market, reports Seeking Alpha. Its human capital management software, including payroll, benefits and HR functions, is currently being used by more than 3,000 companies and 2.5 million active users, according to Bloomberg Technology.
8. DocuSign (DOCU)
Type: Electronic signature software and digital transaction services
Headquartered: San Francisco
CEO: Daniel Springer
Trade date: April 27, 2018
DocuSign and Smartsheet were the bigger technology names debuting last week. Docusign was ranked at the top of Pacific Northwest startups by GeekWire for almost four years and became the second largest tech IPO of the year, following Dropbox, according to GeedWire. The e-signature company's success is demonstrative of the turn to digital for more business functions.
9. Smartsheet (SMAR)
Type: Collaboration and work management software
Headquartered: Bellevue, Washington
CEO: Mark Mader
Trade date: April 27, 2018
Improving connections in the workplace is in, and Smartsheet has managed to capitalize upon the collaboration push. The company closed Friday successfully, with shares up 30% the first day of trading. The companies is now about as valuable as Atlassian but with five times the scale and large free cash flow margins, according to Seeking Alpha.
10. Set to IPO: Carbon Black (CBLK)
Type: Endpoint security software
Headquartered: Waltham, Massachusetts
CEO: Patrick Morley
Trade date: Week of April 30, 2018
Carbon Black is commanding the most attention among companies set to go public this week. The endpoint security solutions company grew at a 51% CAGR from 2015 to 2017 and is set to shift its focus to cloud offerings, reports Seeking Alpha.
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