Big data pioneer Cloudera Inc. confirmed today that it has submitted paperwork for an initial public offering, hoping to raise $200 million to do battle in an intensely competitive market.
The fundraising amount for Cloudera’s IPO, which will be under the ticker symbol CLDR on the New York Stock Exchange, could change by the time the company actually goes public, likely more than a month away. Underwriters for Cloudera’s coming-out include Morgan Stanley, JPMorgan Chase & Co. and Allen & Co.
The filing is another sign that the market for tech IPOs is thawing, especially for enterprise software companies. Application integration company MuleSoft Inc. went public March 17 and saw its shares jump 44 percent the first day. The same week, two other enterprise software and services companies, Okta Inc. and Yext Inc., announced plans to go public. And last week, data preparation company Alteryx Inc. went public.
Rumors that Cloudera had already filed its paperwork surfaced earlier this month, but now the S-1 document itself is available to the public, providing some insight into Cloudera’s current financials and why the company wants to go public in the first place.
According to the document, Cloudera grossed more than $261 million in revenues for the fiscal year that ended in January, up 57 percent from $166 million a year ago. The document also shows that Cloudera lost just under $187 million last year, but this number was also slightly smaller than the $203 million it had lost the year before.
Cloudera sells software, in particular a version of the Hadoop open-source software for storing and processing massive amounts of data across many computers. Key rival Hortonworks Inc. went public in 2014 but has faced challenges in the market and with investors, continuing to lose money and seeing its shares fall from a high of $28 in 2015 to under $10 today.
Other competitors include MapR Technologies Inc. as well as much larger tech companies ranging from cloud leader Amazon Web Services, Oracle Corp., IBM Corp. and Hewlett Packard Enterprise Co. With the sole exception of Red Hat Inc., maker of the operating software Linux, open-source software companies have found it difficult to make money.
Cloudera’s valuation has fluctuated over the last few years. In May 2015, analysts valued Cloudera at more than $4.7 billion but cautioned that it might not be profitable for some time. In April 2016, Fidelity Investments slashed its valuation of Cloudera by 38 percent over concerns that the company had delayed its IPO too long.
In its filing, Cloudera listed several reasons that its stocks could be considered high risk, including a history of losses, its long and unpredictable sales cycles, its reliance on revenue from a single software platform, and rampant competition.
“The market for data management, machine learning and analytics platforms is intensely competitive and characterized by rapid changes in technology, customer requirements, industry standards and frequent new product introductions and improvements,” Cloudera said in its S-1 document. “We anticipate continued challenges from current competitors, which in many cases are more established and enjoy greater resources than us, as well as by new entrants into the industry.”
Cloudera noted that it is also partly dependent on the open source community to develop and enhance its own technologies, and the company said it could be adversely affected if open source developers stop working on its platform.
Despite those risks, Cloudera Chief Strategy Officer and co-founder Mike Olson said that Cloudera will continue to support open-source software and develop new technologies.
“As you can see from our history and our success to date, we intend to build a successful long‑term company,” Olson said in the Founder’s Letter portion of the S-1. “We are willing to take risks – embracing new technologies like Apache Spark ahead of the rest of the market, for example – in order to innovate and lead. You should expect us to make significant disruptive technology bets in the future.”