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July 27, 2016

Talend Set for IPO This Week

There’s been chatter about which big data technology company will be the next to go public after Hortonworks‘ (NASDAQ: HDP) initial public offering of stock in December 2014. Would Hadoop distributor MapR Technologies make the jump, or would it be Pivotal? Or perhaps one of the many NoSQL database firms? It turns out the honor will fall to data integration vendor Talend.

Talend’s IPO will occur this Friday, when the company will offer up to 5.25 million shares for sale on the Nasdaq Global Market. The shares, which will trade under the symbol TLND, are expected to be priced between $15 and $17, netting the company between $78.75 million and $89.25. The underwriters, Goldman Sachs, J.P. Morgan, Barclays, and Citigroup, have an option to buy another three-quarter of a million shares or so, which could up Talend’s haul over $100 million.

The company has roots in the extract, transform, and load (ETL) software world. But in recent years, Talend has been working to move beyond its ETL legacy, to adapt to the big data deluge, and to help customers make sense of big data through new technologies and modes of processing and consumption.

In a regulatory filing it made with the Securities and Exchange Commission last month, Talend describes its business like this:

“Our software platform, Talend Data Fabric, integrates data and applications in real time across modern big data and cloud environments, as well as traditional systems, allowing organizations to develop a unified view of their business and customers across organizational and technology silos.”
Talend is now looking to bolster its big data prospects by working with new technologies like Hadoop, Spark, and NoSQL databases. To that end, its core data transformation software has been adapted to run directly within Hadoop, and to use Spark as the main engine.

At the same time, the company is looking to help customers work with data and applications in the cloud. It’s enabled its various solutions within the Talend Data Fabric–such as data and application integration, master data management, and data prep tools–to work with the leading public clouds, including Amazon (NASDAQ: AMZM) Web Services, Google (NASDAQ: GOOGL) Compute Engine, and Microsoft (NASDAQ: MSFT) Azure.

The company is also doing some cutting edge work with Apache Beam, the new framework based on Google’s Cloud Dataflow technology that’s aiming to unify development of batch and real-time streaming  applications. Beam is being championed by Jean-Baptiste Onofré, who is an SOA software architect at Talend.

In its SEC filing, Talend, which is based in France but does most of its work out of US headquarters in Redwood City, reported 2015 revenue of $76 million with a $22 million loss, while it had $62.6 million in revenues in 2014 on a $22.5 million loss. The company has raised more than $100 million over the years from various investors, including Galileo Partners, Balderton Capital, Idinvest Partners, Iris Capital, and Silver Lake Partners.

Apache Beam

A Talend employee is championing the Apache Beam project

The IPO looks to provide an exit strategy for these investors, while giving the company the added clout that comes with being a public company. However, along with that extra clout comes the regulatory oversight of being a public company, something that many companies in the tech space have avoided. As the boom in venture capital investments begins to slow, it could push more privately held companies to go public. Alternatively, it could drive more merger and acquisition (M&A) activity, which is something the big data industry has experienced quite a bit of recently.

Talend, which has more than 500 employees, will become just the second Silicon Valley company to go public this year. The first was Twilio (NYSE: TWLO), a cloud communication company based in San Francisco. The company’s stock is up nearly 50 percent since the IPO a month ago.

In the meantime, all eyes are on the big data tech’s only public play, Hortonworks, which will report its second quarter earnings on August 4. Since Horton’s IPO, HDP is down 56%, which drove the company to seek outside funding earlier this year. The stock seems poised for a comeback, however, if the numerous recently upgrades by brokerage houses are any indication.

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