Update: The market tumbled at the end of the day, but Hortonworks just kept soaring. It ended the day up almost 65% from its debut. New Relic ended up almost 50%.
Here’s our story from earlier in the day:
The hype cycle for “big data” peaked about a year ago, but you wouldn’t know it by looking at the IPOs of two companies in the field Friday morning.
Hortonworks and New Relic are both up about 40% from their IPO prices. The two companies help make sense of the flood of data often gathered by businesses these days.
The idea of gathering and analysing data is nothing new — similar products known as “business intelligence” or “data analytics” have existed for decades.
But new technologies have sprung up in the past few years that allow businesses to collect more of that data and to store and analyse it much more cheaply and quickly. These technologies have created new companies that threaten to take business away from older tech companies like Oracle and IBM.
Hortonworks is one of the best-known companies in this space. It distributes and supports an open-source technology called Hadoop, which was invented at Yahoo to store and arrange huge amounts of web data on low-cost hardware. It’s used by everybody from web companies like eBay to healthcare companies like UC Irvine Medical Center.
Hortonworks priced at $US16 and jumped almost 50% to over $US24. It’s up about 40% at the time of writing.
New Relic has a much more specific function; it lets companies monitor the stream of information coming from user actions on web applications to make sure those apps are performing up to par. Customers are mostly companies with big online sites like Microsoft, Adobe, and Fox.
New Relic priced at $US23 and jumped to more than $US33. It’s up about 45%.
Both companies raised about $US100 million and are valued at about $US1 billion.
They follow Thursday’s successful debut of Lending Club, which raised close to $US1 billion and was the biggest US tech IPO of the year. It offers an online network for individuals to get personal loans more easily.
These businesses do not have the obvious consumer appeal of companies like Groupon or Facebook, but they have real paying customers and are growing fast. Sometimes boring is good business.