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June 29, 2021

Confluent Raises More Than $800M in IPO

Confluent co-founders Jun Rao, Jay Kreps, and Neha Narkhede ring the opening bell for Nasdaq on June 24 (image courtesy Nasdaq)

Confluent, the company behind Apache Kafka, can now count a successful IPO among its accomplishments, with more than $820 million in shares sold since debuting on the stock market last week.

Confluent, which trades on the Nasdaq Global Select Market under the ticker symbol “CFLT,” today announced the successful close of its initial public offering. As planned, the company sold 23 million shares at $36 per share.

The shares opened on Thursday at more than $46, and dropped a dollar at closing. The stock gained nearly $10 per share in active trading yesterday, before closing at around $53. Its stock price gives it a market capitalization of about $13 billion.

The IPO will give Confluent more capital to further expand its streaming data business, which is based on the open source Apache Kafka software project. The Mountain View, California company, which recorded $236.6 million in total revenue in fiscal year 2020, was valued at $4.5 billion during its last round of venture capital funding in April 2020, which brought in $250 million.

Confluent is positioning its Kafka-based Confluent Platform as the “central nervous system” that enables companies to connect, collect, and analyze a wide range of data types, predominantly for use in downstream analytics and machine learning systems, the company stated in the S-1 form it filed with the Securities and Exchange Commission, which we reviewed earlier this month.

“It is not just that companies are using more software–in a very real sense, they are actually becoming software,” the company wrote in its S-1. “As companies increasingly become software, they need a central nervous system that connects all of their disparate software systems, unifying their business and enabling them to react intelligently in real-time.”

CFLT has risen more than 50% from its initial offering price of $36 per share

Nearly three out of four companies on the Fortune 500 already use Kafka in some way, shape, or form, the company claims. Confluent is now hoping that these companies act upon that initial investment in open source software by subscribing to its two primary commercial offerings, including Confluent Platform, its self-managed offering for enterprises, and Confluent Cloud, a fully hosted version of the streaming data platform that runs in public clouds.

Confluent co-founders Jay Kreps, Neha Narkhede, and Jun Rao, who initially developed Kafka while working at LinkedIn, were invited to ring the opening bell at the Nasdaq site in New York City on June 24, the day of their IPO. Several publications reported that the three co-founders are now billionaires.

Related Items:

Confluent S-1 Reveals ‘Reimagining of Business’ Theme

Three Takeaways from Jay Kreps’ Kafka Summit Keynote

Confluent Files to Go Public. Who Could Be Next?