French-American big data startup Talend made its debut as a public company today with a pop. After pricing its shares at $18 last night (above the expected range of $15-$17), the company began trading on Nasdaq under the ticker TLND at $27.66, up 54 percent on its IPO price, giving the company an implied valuation of $537 million.
However, in the immediate hour after opening, the stock declined about 14 percentage points and it closed at $25.50.
The offering at $18/share the night before raised $94.5 million and was above the company’s expected range of $15-17 and raise of $86.3 million.
Talend’s debut is encouraging news for those who have been wondering about the health of the tech IPO market. There have been very few listings this year, and while Twilio had a strong entry (and continues to pick up speed), Talend — which provides a platform for Hadoop or Spark integration and data management services, disrupting more traditional and costly data warehousing services — could be a sign of more positive reception for IPOs to come, particularly in the area of enterprise services. Some of the hopefuls that we’ve heard might be eyeing up public listings soon include Dropbox, Okta and Puppet Labs.
There seems to be an appetite for more if the metrics are right. In an interview after the stock opened for trading, CEO Mike Tuchen said that part of the reason the company priced above its estimated range was because after the road show, Talend’s bankers said they’d seen much more interest than they had expected. “The fact that we’re cash-flow positive, and our market differentiation,” were two reasons for the positive reception, he said.
Talend’s listing is also positive news for those who wonder about how international startups might fare in U.S. markets at the moment. As a startup, Talend raised just over $100 million from the likes of Silver Lake but also a strong slate of French and European investors like Bpifrance, Balderton, Idinvest, and Iris Capital Partners. It was founded in France in 2005, and now has two headquarters: in Suresnes in the outskirts of Paris and Redwood City, California.
And investors are willing to invest in tech companies that are not immediately profitable. Talend competes against the likes of other public companies like Splunk and Hortonworks, but also privately held businesses like Apatar and Jitterbit. It posted a net loss of $22 million last year on revenues of $76 million. Notably, that loss was level with the year before, while revenues were up from $62.6 million, meaning the company is growing and improving, slowly.
Late last night, Tuchen pointed out that the company was still in its “early days.”
“Today is an important milestone which became possible, in part, because of our singular focus on enabling organizations of all types to become data driven – an increasingly necessary skill in a world where data has become a strategic asset,” he said in a statement. “As notable as today’s milestone is though, we are still in the early days of our journey. We’re looking forward to maximizing the opportunity we have in front of us and building our business for long-term success.
“With the amount of data available for decision-making increasing exponentially, and the technology to analyze and act on that data more capable, cost-effective, and ubiquitous, IT infrastructures are undergoing an industry-wide, transformative shift toward new big data and cloud platforms. Talend’s solutions are well-suited to address that exciting opportunity and help position us to extend our leadership role in next-generation data integration.”
This is one area where the IPO will help the company. This listing essentially doubles the amount of money that it had raised in its time as a private company. The CEO said because that money is not needed to operate the company since it is cash-flow positive, it would be used for things like acquisitions.
“This gives us the opportunity to look at technology tuck-ins in neighboring markets customers may want to buy from, or to deepen our solution in areas we already service.” He declined to say which areas might interest Talend, “but there are always startups out there that are interesting, and we [as an industry] are going through an enormous amount of consolidation.”
Updated with more comments, price updates.