Zuora, Inc (NYSE: ZUO)
Zuora will begin trading on the New York Stock Exchange (NYSE) on Thursday, April 12 under the ticker symbol “ZUO.” The cloud software company filed for $100 million IPO on March 16 seeking to make 10 million shares available to the public at a price range of $9 and $11. However, the company announced a revised price range on Tuesday, increasing it to between $11 and $13.
Under the new range, Zuora is now likely to raise close to $130 million compared to the initial $110 million estimate. Additionally, it could raise close to $149.5 million and sell 11.5 million shares, if the underwriters implement all available options. Allen & Company, Goldman Sachs, Jefferies and Morgan Stanley are acting as the underwriters for the IPO. Zuora joins Spotify (SPOT) and Dropbox (DBX), two other tech firms that have thrown their hats in the ring in 2018.
According to the prospectus that Zuora filed with the U.S Securities and Exchange Commission, the company’s main reason for going public is to become financially flexible and increase capitalization. The company said it expected to make significant expenditures in future, which are related to the expansion and development of its business.
That includes expanding its global footprint, increasing its overall customer base, entering new vertical markets, expanding existing customer relationships, and leveraging global systems integrators (GSIs) in order to accelerate growth, among other things.
Zuora posted $167.9 million worth of revenues for financial 2018 ending January 31, up from $113 million from the previous period a year ago. However, the firm is still posting negative cash flows and large losses. The company’s net loss was $47.2 million for fiscal 2018, compared to $39.1 million the year before. If its shares get traded at the high-end of the nee price range, the firm will climb from its current valuation of $740 million to $1.16 billion.
Zuora was founded in 2007 and its headquarters are in San Matteo, California. The company engages in the creation of cloud products and services that help companies that offer subscription services with consumer behavior insights, billing and pricing. As of December, 2017 the company had a total of 933 employees.
The company’s biggest investors are Benchmark, Wellington Capital Management and Repoint Ventures. Benchmark, the biggest institutional shareholder of the company has a stake of 11.1%. The firm offers its services to more than 900 customers, including companies such as Delta Airlines, Ford Motor, DocuSign and HBO.