Enterprise planning software company Anaplan pulled off its IPO in the middle of a broad market slump last week—raising $263.5 million—and its 43 percent share price surge on the first day of trading continues to hold while Nasdaq and the Dow have yet to fully recover their lost value.
Anaplan’s (NYSE: PLAN) IPO shares, which priced at $17 late on Oct. 11, closed at $24.30 on Friday, Oct. 12. As of Wednesday’s close, they had gained a bit more, closing at $25.43.
The company also reported this week that Anaplan’s underwriters exercised their full option to buy an additional 2,235,000 shares at $17 apiece.
But now that Anaplan has cleared the hurdle of its public debut, CEO Frank Calderoni faces the ongoing task of proving that the company can reach the potential it claimed, which he says spurred strong investor interest. (Anaplan priced at the top of its $15 to $17 range, which had been boosted from $13 to $15 just before the IPO.)
“Clearly, investors will be focused on our growth,” Calderoni said in a post-IPO chat with Xconomy this week. The chief executive says Anaplan has not yet set specific targets to meet on customer numbers or revenue.
San Francisco-based Anaplan sells subscriptions to Web-based software designed to help businesses make holistic plans that not only include financial strategies, but also cover operational decisions by pulling in data related to sales, marketing, IT, human resources, and company supply chains.
Calderoni says this comprehensive approach makes Anaplan a viable competitor to tech giants IBM, Oracle, and SAP. “They tend to use more traditional financial planning applications that have been around for decades,” he says.
Anaplan lays claim to a total addressable market that encompasses the entire category called “performance management and analytic applications software,” which IDC forecasts will grow to a global total of $21 billion by 2021. That category includes production planning, supply chain management, and customer relationship management—the bailiwick of established firms such as Salesforce.
As of the end of July, Anaplan counted 979 customers, including hundreds of the large enterprises that are its target market. HP, United Airlines, Box, and McAfee are among them. But one of the most important users of the company’s enterprise planning software may be Anaplan itself.
Calderoni says the company used its own software to optimize its operations and prepare to take its initial public offering on the road to face potential investors.
Well before that ever happened, Anaplan used its own business functions as a test bed to demonstrate the reach of its planning software and attract customers, he says. Anaplan showed potential subscribers the way it used the service to manage its decisions regarding real estate, sales forecasting, finance, customer relations, and the assignment of sales territories. The company has an internal team called “AoA,” or “Anaplan on Anaplan,” which discovers new internal use cases that might also be adopted by customers, Calderoni says.
When all of a company’s departments are feeding data into a central planning hub, leaders don’t have to spend time reconciling the differences between information from various data silos, Calderoni says.
Consistent, reliable data on sales—“who’s buying what, where”— can improve supply chain decisions, such as locating inventories of each product close to high-demand regions for quick delivery and inventory cost savings, Calderoni says.
Anaplan’s software can not only make use of internal company data, but can also pull in information from the outside world that could impinge on a company’s plans, Calderoni says.
That would include intelligence on the current IPO market at the time when Anaplan was considering a public offering. But as confident as Calderoni is in Anaplan’s tools, he let them take a back seat to outside experts in choosing the IPO’s timing.
“We relied on advisors with in-depth statistics on market dynamics—Goldman Sachs and Morgan Stanley,” Calderoni says, referring to Anaplan’s underwriters.
Photo Credit: Anaplan