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Information technology automation firm HashiCorp Inc. raised $1.2 billion in its initial public offering today after selling its shares well above its targeted range.

The company priced 15 million shares at $80 each, well above its initial range of $68 to $72 per share, a person familiar with the matter told Reuters.

The IPO values HashiCorp at a cool $14 billion, the report added. The shares will start trading publicly Thursday. Update: Shares began trading at $81.16 per share and topped $89 at one point before dropping back a bit. They closed up 6.5%, to $85.19.

HashiCorp sells software that’s used by enterprises to automate the management of their information technology infrastructure. It was founded in 2012 by its Chief Executive Mitchell Hashimoto (pictured) and Chief Technology Officer Armon Dadgar, who created open-source tools that help to reduce a lot of the manual work needed to maintain the computing infrastructure that hosts software applications.

The company’s main tool is Terraform, an infrastructure-as-code offering which enables system administrators to write scripts to define the configuration of cloud and on-premises IT infrastructure, instead of navigating through management consoles. It eliminates the need to configure and adjust hundreds of settings manually.

Terraform and competing infrastructure automation tools have become popular in recent years because modern enterprise technology environments contain too many components for manual configuration to be practical. HashiCorp claims that Terraform can save weeks of work for administrators in some cases. It also reduces the risk of human error.

HashiCorp sells other tools too, such as its Vault product that organizations can use to store sensitive application data. Consul, meanwhile, is HashiCorp.’s network management automation tool, while Nomad is an application scheduler that reduces the amount of work involved in deploying and managing workloads.

HashiCorp’s tools are all open source, and the company reckons Terraform has been downloaded more than 100 million times this year already. It also estimates that more than 11,000 companies around the world have used at least one of its products.

Although its tools are all free to use, HashiCorp makes money by selling commercial editions that are easier to use and come with additional features. The company also offers a managed cloud service called HashiCorp Cloud Platform.

HashiCorp joins a host of cloud technology firms that have moved to list their shares on the public markets in recent months. Like many of those, it remains unprofitable. But it does boast very fast revenue growth, with sales of $211.9 million through Jan. 31 of this year, up from $121.3 million in the 12 months ended Jan. 31, 2020. That’s a rise of 75%, though its losses also grew from $53.4 million to $83.5 million.

HashiCorp’s financials improved in the six months ended July 31. The company narrowed its losses from $67.3 million a year ago to $40.5 million while at the same time maintaining steady revenue growth, increasing sales during the first two quarters of the fiscal year, to $142 million.

In its IPO filing, HashiCorp warned that it expects to incur net losses for the “foreseeable future” as it will continue to invest in what it believes is a huge market opportunity. It estimates that opportunity will be worth $41.7 billion this year, rising to $72.5 billion by 2026.

The size of the market opportunity was not lost on analyst Holger Mueller of Constellation Research Inc., who told SiliconANGLE that today’s IPO was a remarkably positive outcome for one of the most exciting startups he has followed.

“Methodologically planning out a cloud management suite, building a product first in the early days – all to a suite-level of critical functions – has now proven to be the right approach and resulted in HashiCorp becoming the leading muti-cloud management company,” Mueller said. “So congrats to Mitchell Hashimoto and Armon Dadgar, who showed us how to start right with open source and then pivot to become a software company.”

HashiCorp’s shares are listed on the Nasdaq exchange under the ticker symbol “HCP.” Morgan Stanley, Goldman Sachs & Co., J.P. Morgan, BofA Securities Inc. and Citigroup served as the lead underwriters in the offering.

Hashimoto appeared on theCUBE, SiliconANGLE Media’s mobile livestreaming studio, in 2019, when he talked about the importance of simplifying cloud adoption:

Photo: SiliconANGLE