Cloudera's $210M IPO is latest unprofitable tech listing

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(Bloomberg) -- Big-data company Cloudera Inc. aims to raise as much as $210 million in an initial public offering that will continue to test investors’ appetite for young companies with big losses.

The company, which is backed by Intel Corp., is marketing 15 million shares at $12 to $14 each, according to a filing Monday. While Cloudera has posted losses since it was founded in 2008 and warns it may never be profitable, a lack of net income hasn’t dissuaded investors from embracing other listings this year.

Two unprofitable software companies have sold shares in the U.S. in 2017 -- MuleSoft Inc. and Alteryx Inc. Both are trading well above their IPO, after pricing shares at or above the high end of marketed ranges.

After a quiet 2016 for technology listings, valuations are now richer in the public markets and more companies are taking their chances. Outside of enterprise technology, Snap Inc.’s $3.9 billion IPO also showed the demand to bet on what may be the next big consumer technology company.

Significant Discount

Cloudera is giving public market investors a chance to invest at a significant discount to the $4.1 billion valuation the company was awarded in its last private funding round. At the high end of the marketed share price range, Cloudera would have a market value of $1.8 billion based on the 128 million shares to be outstanding after the offering.

For the year ended Jan. 31, the Palo Alto, California-based company’s net loss narrowed to $187.3 million from $203.1 million the previous year, as revenue climbed 57 percent to $261 million.

Intel has a strategic partnership with Cloudera and will hold a 19.4 percent stake after the offering. Accel Partners, which was the first investor in the company, will hold 14.4 percent and Greylock Partners will have 11.1 percent. Existing shareholders aren’t planning to sell shares in the IPO, according to the prospectus. The deal is expected to price on April 27.

Proceeds from the IPO will be used to provide working capital, fund potential acquisitions and for other corporate purposes, the filing shows. The company plans to use 1 percent of the proceeds to fund the Cloudera Foundation, a California non‑profit corporation formed to carry out charitable activities.

Morgan Stanley, JPMorgan Chase & Co. and Allen & Co. are managing the deal. The company will list its shares on the New York Stock Exchange under the symbol CLDR.

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