Snowflake lifted the tallest initial public offering never for an American software company, in the latest sign of Wall Street’s huge demand for cloud computing service companies.
Investors agreed to buy 28 million Snowflake shares valued at $ 120 each, according to those briefed on the offer, raising around $ 3.4 billion in revenue for the company. cloud software. That price would give the company a market capitalization of over $ 33 billion, based on the number of shares outstanding.
Snowflake’s stock price broke the company’s target range of $ 100 to $ 110, which itself was increased by more than a quarter earlier this week. The market value of the company is more than two and a half times the valuation of $ 12.4 billion realized in its most recent fundraising round in February. He declined to comment on the prices.
Snowflake’s IPO will immediately create a huge publicly traded company in the cloud software industry.
The offering is the biggest of the year and the biggest in the United States since Uber’s $ 8.1 billion IPO in May of last year, according to data provider Refinitiv. . VMware, the Dell-majority-owned cloud computing company, already had the largest software IPO in 2007.
Snowflake has attracted investors with a rapidly growing customer base for its data warehousing product, which allows users to analyze data from multiple remote storage vendors, such as Amazon Web Services.
The company’s second quarter revenue grew 121% compared to the same period last year, and it boasts high “net loyalty” figures, which measure customer loyalty.
Like many tech start-ups, Snowflake has spent money to gain market share, posting net losses of $ 348.5 million on revenues of $ 264.7 million in its most recent fiscal year.
The IPO took a boost last week after Warren Buffett’s Berkshire Hathaway and Salesforce accepted every purchase $ 250 million in stock along the IPO. Berkshire bought an additional $ 320 million from Bob Muglia, the company’s former CEO.
Frank Slootman, current CEO of Snowflake, previously oversaw the IPOs of tech companies Data Domain and ServiceNow.
Venture capital group Sutter Hill Ventures is set to reap the biggest profits from the company’s listing, owning more than 20% of its shares before the offer.
Snowflake’s list is further proof of the growing demand for tech companies benefiting from the shift to remote working. The BVP Nasdaq Emerging Cloud Index, which tracks cloud software vendors, has won nearly 59% this year, more than doubling the returns of the larger, highly technological Nasdaq index.
Snowflake’s IPO also comes during a busy IPO week, with a ten companies ready to join the US stock market.
Unity, a video game software company, could raise more than $ 1 billion in a bid later this week, while Sumo Logic, another data platform, and JFrog, an Israeli software development company , also provide for lists.
Snowflake’s deal overshadows two announcements in June that were previously the biggest of the year: Royalty Pharma, which raised $ 2.5 billion, and Warner Music, with $ 2.2 billion.
Recent activity has pushed the amount raised in 2020 to the highest level since 2014, since the start of the year, according to Refinitiv. That year, Alibaba $ 25 billion float set the record for the largest in the world.
Goldman Sachs and Morgan Stanley were the main underwriters of the Snowflake offer.