Shares in financial service provider OneStream Inc. closed their first day trading up more than 34% after making their debut on the Nasdaq this morning, in what could be a positive sign for tech-related initial public offerings going forward.

OneStream filed its paperwork to go public on July 15, with the company initially offering 24.5 million shares available for investors at $17 to $19 apiece. At the high end, OneStream was looking to raise $465.5 million, but thanks to popular demand, the shares ended up priced at $20 on their debut, with the IPO earning OneStream an estimated $490 million.

OneStream sells a cloud platform designed for finance teams to undertake and manage their day-to-day work. The software includes features that speed up common accounting tasks such as reconciliation and also provides analytics features that simulate the impact of future business moves on the bottom line.

Making financial records easier to manage is at the core of the company’s offering. OnsStream’s software consolidates accounting-related data from spreadsheets, customer relationship management platforms and other sources for easier access.

Coming into its IPO, OneStream had more than 1,400 customers, $375 million in revenue in 2023 and, in the best traditions of tech IPOs, it isn’t profitable, though it’s heading in the right direction: It reported a loss of $28.9 million in 2023 versus $65.5 million the year prior.

The strong result is not only a win for OneStream and its investors — notable among them investment firm KKR & Co. Inc. — but also for the broader market.

As Bloomberg noted, the market cap reached by OneStream on its first day of trading was ahead of a valuation the company was given in an equity raise in 2021, despite the company dropping its valuation for the public offering to below that figure.

“When you’re evaluating that you have to look at the unrealistic valuations from 2021,” OneSteam Chief Executive Tom Shea told Bloomberg. “If you were fortunate enough to raise money then, you got a great valuation with minimal dilution, but I don’t use that as a realistic mark. We’re in a world where you have to demonstrate you can grow a business and are either profitable or on the path to profitability.”

That suggests that despite ongoing macroeconomic issues and high interest rates, investors are interested in tech companies with solid fundamentals. As rare as it has been in the past, tech companies in 2024 benefit from having a plan to become profitable versus perpetually bleeding money if they plan to go public.

Image: OneStream