(Corrects paragraph 6 to show revenue jumped to about $445
million, not to about $450 million)
Sept 30 Shares of Nutanix Inc, an
unprofitable provider of enterprise data storage, soared more
than 80 percent in their market debut on Friday, highlighting
demand for tech offerings in what has been a generally quiet
year for IPOs.
Nutanix sold 14.87 million shares on Thursday, more than the
expected 14 million, and priced them $16, above the anticipated
range of $13 and $15, to raise about $238 million.
Nutanix's stock hit $29.67 in early trading, valuing the San
Jose-based company at $4.05 billion, double the valuation it
received in its last funding round in 2014.
Several tech companies, notably Square Inc late last
year, have had to price IPOs below private market valuations as
investors worry about their potential to grow.
However, Nutanix's higher-than-expected valuation and
first-day pop showed there was still demand for companies that
are growing, even if they are not yet profitable.
The seven-year old company has been running up losses over
the past few years, mainly due to rising expenses. Its net loss
rose by a third to $168.5 million in the year ended July 31 but
revenue jumped 84 percent to about $445 million.
Hopes for Nutanix rest on technologies, similar to those
used by Alphabet Inc's Google and Amazon Inc,
that the company uses in its datacenter platforms to eliminate
the need for external storage, speed up data transfer and cut
costs for customers.
Such "hyperconverged" systems bring together server, storage
and virtualization software in one machine.
Nutanix, headed by co-founder Dheeraj Pandey, had 3,768
end-customers as of July 31, its IPO filing showed, including
Activision Blizzard Inc, Best Buy Co Inc and
Nintendo Co Ltd.
Nutanix joins a series of tech companies, including
cloud-based communication services provider Twilio Inc,
advertising technology company Trade Desk Inc and
Japanese chat service operator Line Corp, in staging
successful market debuts in recent months.
Choppy market conditions discouraged many companies -
including Nutanix - from going public for much of 2016, although
activity has picked up in recent weeks.
Money raised from IPOs fell by more than a third to $79.2
billion in the first three quarters of the year, the slowest
such period since 2009, Thomson Reuters Equity Capital Markets
(ECM) data showed.
Nutanix's backers include Lightspeed Venture Partners,
Khosla Ventures and Blumberg Capital.
Goldman Sachs & Co, Morgan Stanley & Co LLC, J.P. Morgan
Securities LLC and RBC Capital Markets were among the offering's
12-member underwriting syndicate.
(Reporting by Sruthi Shankar in Bengaluru; Additional reporting
by Supantha Mukherjee; Editing by Ted Kerr)