Marketo Shares Pop More Than 50% In IPO
Marketo shares surged after the company's initial public offering today, rising more than 50% from its offering price.
Marketo, which provides marketing automation software, priced 6.06 million shares last night at $13 per share (the high end of the $11-$13 range), then opened today at $20. It is trading at $20.22 in early afternoon trading on the NASDAQ.
The company's market capitalization is about $724 million, not including additional optional shares available to purchase for underwriters.
Founded in 2006, Marketo is the latest enterprise technology company to draw attention from investors after companies such as Workday WDAY +1.15%, Palo Alto Networks PANW +4.33% and ServiceNow NOW +1.23% went public in the past year. Tableau Software, a big data visualization company, also went public today on the NYSE.
The company's cofounder and CEO Phil Fernandez, who rang the opening bell at the NASDAQ this morning, says that demand from marketers for enterprise tools to manage their web sites and other marketing channels has been growing quickly with the growth of social and mobile. Marketo now has customers in healthcare, technology, academia, film and music. "We hit the market at just the right time," Fernandez said.
Marketo's competitors include Eloqua, which was recently acquired by Oracle ORCL +1.89%, HubSpot and Act-On. Increased interest in this sector, including Oracle recently buying Marketo's biggest competitor, Eloqua, is good for Marketo, Fernandez said. "Buyers really want to deal with category leaders. Workday (for example) has been so strong," Fernandez said. "I think the real demand is for pure play companies in each segment. That really lets us shine as that company."
In the first quarter, Marketo generated revenue of $19.7 million, up from $12.2 million in the year-ago period. Net loss was $9.5 million, up from $6.7 million a year ago.
The San Mateo, Calif. company raised close to $100 million in funding from InterWest Partners (33.3% prior to the IPO), Storm Ventures (17.4%), Mayfield Fund (14.2%), Institutional Venture Partners (12.8%) and Battery Ventures (7.2%).
In addition, Battery Ventures is buying 500,000 more shares at the IPO in a concurrent private placement at $13 per share.
(Article and image via Forbes)
Goldman Sachs and Credit Suisse are lead underwriters on the deal.