New York City-based database company MongoDB Inc. is moving forward with its initial public offering, but the company set a price range that values it significantly below the level of its last venture capital round.

According to its newly updated filing, MongoDB will go public with shares priced between $18 and $20 apiece, which Business Insider reported means that at the midpoint, the company is valued at $930 million, far below its previous valuation of $1.6 billion.

Founded in 2007, MongoDB develops open-source database software, including its namesake MongoDB NoSQL database, with a business model based on selling tools for the open-source software it develops.

It’s a business model that has been popular with some startups, such as with the Hadoop big-data software provider Cloudera Inc., which also went public earlier this year. But it’s not a particularly profitable enterprise, with the company reporting in its filing that it lost $45.8 million on revenue of $68 million in the first six months of this year. However, as SiliconANGLE reported in September, that was only a fraction of a million dollars more than the same period a year ago, when its revenue was just $45.1 million, showing the company’s losses relative to revenue are narrowing.

MongoDB has been growing its product range in an effort to become profitable in the longer term, with new offerings such as MongoDB Stitch, a product that claims to ease the task of building application backends using its document store. But the question for investors is whether new products such as this, and further product launches in the future, will be enough to turn the company into a profitable one.

That the company is going public at a lower valuation is not a particularly good sign, either since it’s a sign of how the market may perceive the company’s growth prospects going forward. Cloudera, when it went public in April, also priced its shares below earlier valuation estimates and since that time has failed to deliver on its initial promises, with shares in the company plunging after it issued its first post-IPO earning report in June. Although Cloudera actually beat market expectations in terms of revenue, it revised down future growth projections, much to the disdain of investors.

Like all companies going public, MongoDB is promising revenue growth going forward, but with the market already wary of companies in the space, it will be interesting to see how the IPO is received. MongoDB is scheduled to list on the Nasdaq Global Market under the symbol MDB on Oct. 19.

Photo: crodas/Flickr