Talend Raises $95M in IPO: A Boost For Others Waiting in the Wings?
The pricing of data integration company Talend’s IPO shares late Thursday, and its instant jump in trading Friday, delivered a booster shot for the optimism following fellow Silicon Valley company Twilio’s successful market debut last month.
Talend sold 5.25 million shares at $18 apiece, above its anticipated range of $15 to $17, to raise $95 million. That total could rise above $100 million if underwriters exercise 30-day options to buy as many as 787,500 more shares.
Trading in the new public company (NASDAQ: TLND) opened at $27.66, a bump of more than 50 percent over the IPO price. Although later trading hovered around $25, that still maintained a market boost of more than 40 percent.
Talend, founded in France in 2005, now has co-headquarters in Redwood City, CA, and Suresnes, near Paris. The company offers software products designed to help businesses derive useful conclusions by analyzing the masses of data they collect from Web-based applications, devices, in-house servers, and other sources. Talend is one of the companies trying to lower the cost and increase the speed of integrating all that data, while minimizing the need for businesses to pay developers for custom coding.
Talend is competing in a data integration and management market estimated at $16 billion in 2015 by International Data Corp. (IDC), which predicts a rise in that market to $21 billion in 2019.
Tech heavyweights IBM, Microsoft, Oracle and SAP, which offer data integration as part of their services, compete with Talend. In the registration statement for its IPO, Talend also identified competitors among pure-play data integration companies: Ab Initio, Informatica, and Tibco.
Market watchers have been looking for signs that public investors will still back tech companies that aren’t yet profitable. Talend increased its revenues from $62.5 million in 2014 to $75.9 million in 2015. But its net loss in 2015 was $22 million, close to its 2014 net loss of $22.5 million.
Talend offers businesses free access to a limited slice of its data integration platform, which is based on open source software. Once developers inside a business take Talend’s tools for a spin, they often influence their employers to sign up for paid subscriptions, Talend said in its SEC filing. With its IPO capital, Talend plans to expand its product offerings and beef up sales and marketing efforts to expand the use of its products by existing clients and attract new customers worldwide.
Among Talend’s 1,300 current customers are General Electric, Air France, Siemens, Lenovo, and Sony. The company has more than 550 employees in ten countries. It is led by CEO Mike Tuchen, a Microsoft veteran who previously led Rapid7, a Boston-based cybersecurity company that had an IPO last July.