Datadog Inc has raised the expected price range for its upcoming initial public offering, which could see it raise up to $717.6 million.
The monitoring and analytics company said it plans to offer 24 million shares at a price range of $24 to $26 per share, according to an updated filing with the U.S. Securities and Exchange Commission on Tuesday. That is higher than the $19 to $22 price range that underwriting banks had initially set, and would give the company a valuation of more than $7 billion.
New York-based Datadog could raise up to $717.6 million if the underwriting banks exercise overallotment options to buy up to an additional 3.6 million shares. The company plans to list its shares under the symbol “DDOG” on the Nasdaq Global Select Market.
Goldman Sachs, Morgan Stanley, JPMorgan, Barclays, Credit Suisse, Jefferies, JMP Securities, RBC Capital Markets, Raymond James, William Blair, Needham, and Stifel are the underwriters for the offering.
Founded in 2010, Datadog offers a software-as-a-service platform that allows companies to manage their business teams and cloud operations while tracking performance and business metrics. The company had about 8,800 customers as of June 30, 2019, compared with roughly 7,700 customers as of December 2018.
Some of its customers include: Dropbox (NASDAQ: DBX), Twilio (NYSE: TWLO), UnitedHealth Group (NYSE: UNH), Morgan Stanley (NYSE: MS), and Expedia (NASDAQ: EXPE).
Datadog competes with Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG), Microsoft Corp. (NASDAQ: MSFT), Cisco Systems (NASDAQ: CSCO), New Relic (NYSE: NEWR), Dynatrace Software, Splunk (NASDAQ: SPLK), and Elastic N.V. (NYSE: ESTC).
Datadog posted a net loss of $13.4 million in the six months ended June 30, versus a profit of $498,000 in the same period last year. The company plans to use the net proceeds from the IPO for general corporate purposes and working capital.
“As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to us from this offering. However, we currently intend to use the net proceeds we receive from this offering for general corporate purposes, including working capital, operating expenses and capital expenditures. We may also use a portion of the net proceeds to acquire complementary businesses, products, services or technologies,” the prospectus reads.
Datadog had revenue of $100.8 million in 2017, up 97% from revenue of $198.1 million in 2018. Revenue in the six months ended June 30, 2018 stood at $85.4 million, up 79% from revenue of $153.3 million in the same period a year earlier.
