HubSpot is having a hell of day. After raising its IPO price range, the company pulled the trigger above that level, selling its shares for $25 each. That’s a far cry from the original low-end of its first proposed price range of $19.
The markets welcomed the company’s offering, pushing its shares up more than 20 percent at the time of writing. Yahoo Finance lists Hubspot’s market capitalization at just over $900 million; the company raised $125 million in its flotation.
The HubSpot IPO is an important one for the technology market, as it sets the tone for future offerings: The IPO window is open for companies that lose money but demonstrate quickly expanding revenue. This is not news, per se, but it does point to a continuation of past trends that are still in apparent effect.
HubSpot had a slim cash load before its offering. The fresh $125 million in capital will more than provide it with the short-term cash reserves that it needs. Employing its GAAP metrics, HubSpot has quarters and quarters of runway. Naturally, if the company flips to GAAP profitability in that period, such concerns evaporate. There is tension between GAAP profits and cash burn, of course, but let’s speak broadly. Given the success of its IPO, HubSpot will not have to resort to debt to fund its operations.
The Boston component to the moment shouldn’t be overlooked. For Boston, it’s a massive day. A large number of millionaires were just minted, presumably, in the area that may plow some of their profits into the local startup scene. A win of this magnitude can have ripple-effects that last for years. HubSpot raised around $100 million before its public offering, meaning that it picked up more cash today than it had to date.