As Competitors Stumble, Nimble Storage Goes Public On Friday

Sures Vasudevan Nimble StorageNimble StorageSuresh Vasudevan, CEO, Nimble

The next enterprise startup to become a public company will happen on Friday.

Nimble Storage plans to sell 8 million shares and raise up to $US160 million. Shares will be priced between $US18 and $US20 a share.

Nimble makes storage hardware for corporate data centres using flash technology. Flash is the same type of storage used by thumb drives and smartphones. Flash drives (also called solid state drives) are faster than traditional enterprise storage methods (which use disk drives or tape).

There’s no question that flash storage will be big in the years to come. IDC expects it to be a $US1.2 billion market by 2015. And so, naturally, there’s a whole crop of young companies in this market. Plus the big storage players, like EMC and HP, have jumped in, too.

However the timing of this IPO is brave. Two previous flash storage companies are struggling and their stock is tanking: Fusion-io and Violin Memory.

Fusion-io was a tech IPO darling of 2011, launching at $US19. Today, it’s trading at about $US8.60, as it struggles to sign new customers.

Violin had its IPO a mere two months ago which didn’t go well. Shares dove from $US9 to $US7 on opening day. Then it reported its first quarterly earnings in late November, missing analyst expectations, and things got even more rocky. The stock is trading at under $US3 now.

As for Nimble, in the first nine months of this year, it made $US75.7 million in revenue, with a net loss of nearly $US30 million. In 2012, it made $US31.1 million in revenue with a loss of nearly $US18 million.

Still, there’s a positive sign that Nimble’s roadshow is going well and that investors are interested: earlier this week, it raised its price range $US2 from $US16 – $US18 to $US18 – $US20.

On Friday, we’ll see what happens.

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