Riding what has been a tumultuous wave for publicly-traded technology stocks, today the cloud-based help desk business Zendesk debuted on the New York Stock Exchange. Setting its pricing at $9 per share yesterday, the stock opened up 27% higher at $11.40 on its first trade — a modest rise and by no means a bust. Things got even more positive as the day went on: it rose steadily throughout Thursday, and at market close market close it was at nearly 49% above its opening price, at $13.65 per share.
That puts Zendesk’s current market cap at something between $940 million and $955 million.
At $9 per share for the 11,111,111 shares Zendesk was offering, this was squarely in the middle of the $8 to $10 range the company most recently projected.
Zendesk raised just short of $100 million — although that was some $50 million short of the amount originally planned for when it first filed for its IPO around a month ago. The $9/share price values Zendesk at around $632 million.
Zendesk, originally founded in Denmark but now based in San Francisco, is tapping into a couple of bigger trends at the moment.
The first is the general surge in enterprise startups over the last year or so, in the wake of several years of focus on consumer plays.
And the second is the big shift to cloud services, tapping into the growth of better data networks and mobile devices with less storage, as a way to deliver them more efficiently.
Zendesk says it has some 42,000 customer accounts from 140 countries at the moment and has been growing quickly. Revenues in 2013 were $72 million, up 88% on a year before. The first quarter of 2014 to March 31 saw sales of $25.1 million, up 80% on the same quarter a year ago.
But while cloud-based businesses have been one of the biggest growth engines in enterprise technology, they have been doing so on a much thinner margin base than their larger, legacy competitors.
