(Bloomberg) — HashiCorp Inc. rose 6.5% in its trading debut after raising $1.2 billion in an initial public offering priced above a marketed range, adding to the year’s lengthy roster of software listings.
The San Francisco-based company, whose shares opened trading Thursday at $81.16, had sold 15.3 million shares for $80 after marketing them for $68 to $72. The shares closed at $85.19, giving the company a market value of almost $15 billion. Accounting for employee stock options and restricted stock units, the company has a fully diluted value of more than $17 billion.
More than $37 billion has now been raised by 80 software companies on U.S. exchanges this year, according to data compiled by Bloomberg. Software listings have been one of 2021’s dominant categories, partly fueled by businesses accelerating plans to go digital in response to the coronavirus pandemic.
“The cloud operators of the world have gotten really busy during the pandemic,” HashiCorp Chief Executive Officer David McJannet said in an interview. There was “really good acceleration of the adoption of our open-source tech,” he said.
HashiCorp was founded in 2012 by Mitchell Hashimoto and Armon Dadgar, who met at the University of Washington in Seattle. HashiCorp raised $175 million in a series E financing round last year at a valuation of $5.1 billion, according to a statement.
Amazon, Alphabet
The company’s software helps businesses run a mix of public and private cloud systems, as well as older applications. It has partnerships with cloud platforms including Amazon.com Inc.’s AWS and Alphabet Inc.’s Google Cloud, its website shows.
Hashimoto and Dadgar emphasize their commitment to their “open-source philosophy” in a letter to investors included in the company’s prospectus.
“The cloud market is already an enormous market that is upending every industry and reshaping the modern tech stack,” they said. “Yet, cloud adoption is still early, and most organizations are only beginning their digital transformation.”
HashiCorp posted a net loss of $62 million on revenue of $224 million for the nine months ended Oct. 31, according to its filings with the U.S. Securities and Exchange Commission. That compares with a net loss of $77 million on revenue of $150 million for the same period a year earlier.
Investors in HashiCorp include affiliates of Mayfield, GGV Capital, and Redpoint Omega, according to the filings.
‘Early Innings’
GGV Managing Partner Glenn Solomon, a HashiCorp board member, said he expects demand for the company’s software tools to grow.
“Every company in the world is becoming a software company,” Solomon said. “We’re still in the fairly early innings of cloud adoption.”
The offering was led by Morgan Stanley, Goldman Sachs Group Inc. and JPMorgan Chase & Co. The shares are trading on the Nasdaq Global Select Market under the symbol HCP.
(Updates with closing share price in second paragraph)
More stories like this are available on bloomberg.com
©2021 Bloomberg L.P.
