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April 20, 2018

Pivotal Software is Latest Tech IPO

George Leopold

iQoncept/Shutterstock

The uptick in technology stock offerings that accelerated in 2017 is gaining momentum this year as Pivotal Software joins a host of big data vendors going public.

The San Francisco-based cloud software vendor announced pricing on 37 million shares at $15 a share. The shares began trading Friday (April 20) on the New York Stock Exchange under the ticker symbol “PVTL.” The offering is expected to close on April 24.

A leading force behind the Cloud Foundry movement, Pivotal ditched its proprietary big data strategy in 2015, announcing a major repositioning of its core products that include Greenplum, GemFire (an in-memory NoSQL database) and HAWQ (an interactive SQL engine similar to Hive) as open source offerings.

The latest version of its Greenplum database platform unveiled last September runs on leading public clouds as well as private clouds based on VMware vSphere and OpenStack.

Pivotal joins a growing list of cloud-oriented startups that have launched IPOs over the last year, including MongoDB (NASDAQ: MDB) and Cloudera (NYSE: CLDR). That trend is expected to continue as “patient” venture capital pours into the cloud-based analytics sector. Market analysts note that the ability to focus on growth rather than profits has created a favorable environment for technology IPOs.

“We’ve actually seen an acceleration in the number of [tech startups] that are considering putting themselves in a position to go public,” said Will Connelly, head of technology equity capital markets at investment banking giant Goldman Sachs (NYSE: GS).

“The outlook for 2018 is driven by this improvement in the IPO market that we’ve witnessed in 2017 [along with] improving market valuations that companies find more favorable and this ability to investment more in their growth” as opposed to “driving towards profitability as quickly as they can.”

Connelly said he expects more tech IPOs throughout 2018.

Pivotal CEO Rob Mee also credited the company’s strategic shift to open source development, including Cloud Foundry, Greenplum and Apache Geode, the distributed, in-memory database grounded on Pivotal’s Gemfire data grid.

“…we are delivering on our promises of multi-cloud developer productivity, operational efficiency and security,” Mee said.

Pivotal was spun off from VMware (NYSE: VMW) in 2013 to help implement the Cloud Foundry framework. Among Pivotal’s investors are Dell Technologies, Microsoft (NASDAQ: MSFT)

and VMware. Pivotal was spun out from EMC prior to Dell Technologies’ (NYSE: DVMT) acquisition of the storage giant.

As part of the Pivotal IPO, General Electric (NYSE: GE), another early strategic investor that poured $105 million into the cloud startup, is offering more than 3.8 million shares, or about 20 percent of its holdings in Pivotal, the company said.

After the first day of trading, Pivotal’s shares closed at $15.73.

–Editor’s note: This story has been updated.

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