ZoomInfo Technologies Inc. this morning became the first software-as-a-service provider to go public in 2020 after debuting on the Nasdaq stock exchange at $40 per share, about 90% above its initial public offering price.

The IPO pricing itself represented a significant increase over the company’s original target. ZoomInfo had set out to raise up to $500 million when it submitted the paperwork for the IPO earlier this year, but ended up raking in $934.5 million Wednesday afternoon. The offering is the biggest for the tech industry so far this year. 

ZoomInfo closed the day up 62% from its IPO price, to $34 a share, valuing the company at $13.4 billion.

Vancouver, Washington-based ZoomInfo sells a market intelligence platform used by sales and marketing professionals at business-to-business companies to find customers. A salesperson whose company makes marketing software aimed at retailers, for example, could employ ZoomInfo to find marketing executives at grocery chains. ZoomInfo also provides data on an organization’s corporate structure, office locations, recent news and other details to help users customize their customer acquisition efforts.

ZoomInfo claims more than 190,000 paid users across about 14,000 companies. This customer base pushed the firm’s revenue from $54.6 million in the first quarter of 2019 to $102.2 million during the first three months of 2020. ZoomInfo, which is unprofitable, also managed to reduce its quarterly losses nearly tenfold in the same period, to $5.9 million.

Another factor that likely contributed to the IPO’s success is that, though it closed the first quarter in the red, the company generated free cash flow of $64 million. That’s up from $44.4 million in the whole of 2019. Free cash flow, the money left after operating expenses and capital expenditures, is a key metric of how well-positioned a company is to become profitable.

ZoomInfo has also continued to see growth since it closed the books on its first quarter. Speaking to Forbes, Chief Executive Henry Schuck said that April was the company’s strongest-ever first month of a sales quarter.

ZoomInfo’s strong Nasdaq listing is potentially good news for the largely stagnant tech IPO market. The successful offering is particularly encouraging for Shift4 Payments LLC,  a provider of point-of-sale systems and payment processing services that is reportedly expected to price its IPO later today. Online used car marketplace Vroom Inc. is gearing up for a $300 million public offering of its own.

The broader IPO market has started showing some positive signs. The Financial Times recently reported that six companies, including Shift4 and Vroom, had filed for a U.S. IPO in the two weeks leading up to March 24, more than the total number of filings made the month before. Bank of America executive Neil Kell told the publication that he’s anticipating a “wave” of public offerings.  

Photo: Nasdaq