The latest enterprise cloud provider to go public, Veeva Systems, is still flying high one day after a killer IPO.
Veeva closed the day at over $US41, up 12% from its close on Wednesday and more than double its IPO price of $US20 on Wednesday.
Veeva is a customer management cloud service for life sciences companies like Pfizer. By going public on the NYSE, it raised around $US217 million at a $US2.4+ billion valuation. Shares popped nearly 84% in initial trading Wednesday.
One reason for its popularity: Veeva is the rare cloud company that is already profitable. Veeva generated $US129,548 in revenue for its last fiscal year and net income of $US18.8 million.
It had revenue of $US92,36 for the first six months of 2013, and net income of $US10.8 million
This is the second Salesforce.com alumni in two months to take the public market by storm.
Veeva was founded in 2007 by CEO and former Salesforce executive Peter Gassner. (Veeva itself is built upon the Salesforce.com cloud.)
Last month, Rocket Fuel, founded by another Salesforce.com alum, George John, went public, too. Rocket Fuel uses big data technology to help companies buy online ads. John was at Yahoo before starting Rocket Fuel and Salesforce.com before that.
Rocket Fuel raised about $US116 million, with shares initially priced at $US29. They soared more than 90% on day 1 and and almost a month later, closed Thursday at almost $US64.
While success stories like these are good for investors, it also means that companies are not getting their IPO pricing quite right, points out Forbes’ Nathan Vardi. Price it high and the stock could flop like Facebook’s. Price it low and it skyrockets, meaning the company left a lot of money on the table.