Enterprise Cloud Software Companies Tableau and Marketo Debut Strong IPOs

The climate for initial public offerings (IPOs) in the technology space has been a bit less stormy since Facebook’s (News - Alert) long-anticipated IPO went awry just about one year ago. And now we are seeing more IPO movement in the enterprise cloud segment, with not one but two companies – Tableau Software and Marketo (News - Alert) – which recently debuted on New York stock exchanges.

Tableau Software, which is a business intelligence provider now trading as “DATA,” is one of the more highly anticipated tech IPOs of the year, according to TechCrunch. The Seattle-based company’s stock opened on the NYSE at $47, up 52 percent from its $31 offer price. Tableau Software raised $254.2 million at the $31 per share price, after raising that IPO from an initial range of $23 to $26, giving the company a valuation of $2 billion.

“We believe making it easy for people to see and understand data represents one of the great opportunities in computing this century,” Christian Chabot, CEO and co-founder of Tableau Software, said in a statement. “We’re thrilled to partner with NYSE Euronext to advance our company.”

In the meantime, Marketo, a cloud-based marketing services company, priced its IPO at $13 per share. The six-year-old company is trading as “MKTO” on the NASDAQ exchange and went up by more than 50 percent in early activity and then continued to slowly climb.

The San Mateo, Calif.-based enterprise software company sold 5.75 million shares to the public, with early investors selling an additional 300,000 shares. In addition, one of those early investors, Battery Ventures, bought 500,000 additional shares at the IPO price in a private offering. Battery had the smallest stake of the five venture capital firms that have pumped nearly $100 million into Marketo. The company raised just under $85 million at a $550 million valuation.

Marketo, which was founded in 2007, offers software that helps marketers reach potential customers and gauge the effectiveness of their efforts, with its products offered through the cloud. Cloud software – also known as software as a service, or SaaS (News - Alert) – is accessed over the Internet on servers maintained by the software company, keeping costs for hardware and maintenance down for the businesses that subscribe.

Marketo and Tableau Software “are riding the wave of enterprise cloud software companies that have gone public in the past year with strong receptions from IPO investors, followed by strong aftermarket performance as well,” according to PrivCo founder and CEO Sam Hamadeh.

Hamadeh, whose company analyzes financial data of private companies, said in an e-mail that cloud companies are well-received by Wall Street because their earnings are more predictable – with customers paying monthly or annual subscription rates instead of buying boxed software on a whim.