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Megvii, the Chinese startup unicorn known for facial recognition tech, files to go public in Hong Kong
Megvii Technology, the Beijing-based artificial intelligence startup known in particular for its facial recognition brand Face++, has filed for a public listing on the Hong Kong stock exchange.
Its prospectus did not disclose share pricing or when the IPO will take place, but Reuters reports that the company plans to raise between $500 million and $1 billion and list in the fourth quarter of this year. Megvii’s investors include Alibaba, Ant Financial and the Bank of China. Its last funding round was a Series D of $750 million announced in May that reportedly brought its valuation to more than $4 billion.
Founded by three Tsinghua University graduates in 2011, Megvii is among China’s leading AI startups, with its peers (and rivals) including SenseTime and Yitu. Its clients include Alibaba, Ant Financial, Lenovo, China Mobile and Chinese government entities.
The company’s decision to list in Hong Kong comes against the backdrop of an economic recession and political unrest, including pro-democracy demonstrations, factors that have contributed to a slump in the value of the benchmark Hang Seng index. Last month, Alibaba reportedly decided to postpone its Hong Kong listing until the political and economic environment becomes more favorable.
Megvii’s prospectus discloses both rapid growth in revenue and widening losses, which the company attributes to changes in the fair value of its preferred shares and investment in research and development. Its revenue grew from 67.8 million RMB in 2016 to 1.42 billion RMB in 2018, representing a compound annual growth rate of about 359%. In the first six months of 2019, it made 948.9 million RMB. Between 2016 and 2018, however, its losses increased from 342.8 million RMB to 3.35 billion RMB, and in the first half of this year, Megvii has already lost 5.2 billion RMB.
Investment risks listed by Megvii include high R&D costs, the U.S.-China trade war and negative publicity over facial recognition technology. Earlier this year, Human Rights Watch published a report that linked Face++ to a mobile app used by Chinese police and officials for mass surveillance of Uighurs in Xinjiang, but it later added a correction that said Megvii’s technology had not been used in the app. Megvii’s prospectus alluded to the report, saying that in spite of the correction, the report “still caused significant damages to our reputation which are difficult to completely mitigate.”
The company also said that despite internal measures to prevent misuse of Megvii’s tech, it cannot assure investors that those measures “will always be effective,” and that AI technology’s risks and challenges include “misuse by third parties for inappropriate purposes, for purposes breaching public confidence or even violate applicable laws and regulations in China and other jurisdictions, bias applications or mass surveillance, that could affect user perception, public opinions and their adoption.”
From a macroeconomic perspective, Megvii’s investment risks include the restrictions and tariffs placed on Chinese exports to the U.S. as part of the ongoing trade war. It also cited reports that Megvii is among the Chinese tech companies the U.S. government may add to trade blacklists. “Although we are not aware of, nor have we received any notification, that we have been added as a target of any such restrictions as of the date this Document, the existence of such media reports itself has already damaged our reputation and diverted our management’s attention,” the prospectus said. “Whether or not we will be included as a target for economic and trade restrictions is beyond our control.”
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Ping Identity files for $100M IPO on Nasdaq to trade as ‘PING’
Some eight months after it was reported that Ping Identity’s owners Vista Equity had hired bankers to explore a public listing, today Ping Identity took the plunge: the Colorado-based online ID management company has filed an S-1 form indicating that it plans to raise up to $100 million in an IPO on the Nasdaq exchange under the ticker “Ping.”
While the initial S-1 filing doesn’t have an indication of price range, Ping is said to be looking at a valuation of between $2 billion and $3 billion in this listing.
The company has been around since 2001, founded by Andre Durand (who is still the CEO), and it was acquired by Vista in 2016 for about $600 million — at a time when a clutch of enterprise companies that looked like strong IPO candidates were going the private equity route and staying private instead.
But more recently, there has been a surge in demand for better IT security linked to identity and authentication management, so it seems that Vista Equity is selling up. The PE firm is taking advantage of the fact that the market’s currently very strong for tech IPOs, but there is so much M&A in enterprise right now (just yesterday VMware acquired not one but two companies, Carbon Black for $2.1 billion and Pivotal for $2.7 billion) that I can’t help but wonder if something might move here too.
The S-1 reveals a number of details on the company’s financials, indicating that it’s currently unprofitable but on a steady growth curve. Ping had revenues of $112.9 million in the first six months of 2019, versus $99.5 million in the same period a year before. Its loss has been shrinking in recent years, with a net loss of $3.1 million in the first six months of this year versus $5.8 million a year before (notably in 2017 overall it was profitable with a net income of $19 million. It seems that the change is due to acquisitions and investing for growth).
Its annual run rate, meanwhile, was $198 million for the first six months of the year, compared to $159.6 million in the same period a year ago.
The area of identity and access management has become a cornerstone of enterprise IT, with companies looking for efficient and secure ways to centralise how not just their employees, but their customers, their partners and various connected devices on their networks can be authenticated across their cloud and on-premise applications.
The demand for secure solutions covering all the different aspects of a company’s IT stack has grown rapidly over recent years, spurred not just by an increased move to centralised applications served through the cloud, but also by the drastic rise in breaches where malicious hackers have exploited vulnerabilities and loopholes in companies’ sign-on screens.
Ping has been one of the bigger companies building services in this area and tackling all of those use cases, competing with the likes of Okta, OneLogin, AuthO, Cisco and dozens more off-the-shelf and custom-built solutions.
The company offers its services on an SaaS basis, covering services like secure sign-on, multi-factor authentication, API access security, personalised and unified profile directories, data governance and AI-based security policies. It claims to be the pioneer of “Intelligent Identity,” using AI to help its system analyse user, device and network behavior to better identify potentially malicious activity.
More to come.
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Twitter picks up team from narrative app Lightwell in its latest effort to improve conversations
Twitter’s ongoing, long-term efforts to make conversations easier to follow and engage with on its platform is getting a boost with the company’s latest acquihire. The company has picked up the team behind Lightwell, a startup that had built a set of developer tools to build interactive, narrative apps, for an undisclosed sum. Lightwell’s founder and CEO, Suzanne Xie, is becoming a director of product leading Twitter’s Conversations initiative, with the rest of her small four-person team joining her on the conversations project.
(Sidenote: Sara Haider, who had been leading the charge on rethinking the design of Conversations on Twitter, most recently through the release of twttr, Twitter’s newish prototyping app, announced that she would be moving on to a new project at the company after a short break. I understand twttr will continue to be used to openly test conversation tweaks and other potential changes to how the app works. )
The Lightwell/Twitter news was announced late yesterday both by Lightwell itself and Twitter’s VP of product Keith Coleman. A Twitter spokesperson also confirmed the deal to TechCrunch in a short statement today: “We are excited to welcome Suzanne and her team to Twitter to help drive forward the important work we are doing to serve the public conversation,” he said. Interestingly, Twitter is on a product hiring push it seems. Other recent hires Coleman noted were Other recent product hires include Angela Wise and Tom Hauburger. Coincidentally, both joined from autonomous companies, respectively Waymo and Voyage.
To be clear, this is more acqui-hire than hire: only the Lightwell team (of what looks like three people) is joining Twitter. The Lightwell product will no longer be developed, but it is not going away, either. Xie noted in a separate Medium post that apps that have already been built (or plan to be built) on the platform will continue to work. It will also now be free to use.
Lightwell originally started life in 2012 as Hullabalu, as one of the many companies producing original-content interactive children’s stories for smartphones and tablets. In a sea of children-focused storybook apps, Hullabalu’s stories stood out not just because of the distinctive cast of characters that the startup had created, but for how the narratives were presented: part book, part interactive game, the stories engaged children and moved narratives along by getting the users to touch and drag elements across the screen.
After some years, Hullabalu saw an opportunity to package its technology and make it available as a platform for all developers, to be used not just by other creators of children’s content, but advertisers and more. It seems the company shifted at that time to make Lightwell its main focus.
The Hullabalu apps remained live on the App Store, even when the company moved on to focus on Lightwell. However, they hadn’t been updated in two years’ time. Xie says they will remain as is.
In its startup life, the company went through YCombinator, TechStars, and picked up some $6.5 million in funding (per Crunchbase), from investors that included Joanne Wilson, SV Angel, Vayner, Spark Labs, Great Oak, Scout Ventures and more.
If turning Hullabalu into Lightwell was a pivot, then the exit to Twitter can be considered yet another interesting shift in how talent and expertise optimized for one end can be repurposed to meet another.
One of Twitter’s biggest challenges over the years has been trying to create a way to make conversations (also narratives of a kind) easy to follow — both for those who are power users, and for those who are not and might otherwise easily be put off from using the product.
The crux of the problem has been that Twitter’s DNA is about real-time rivers of chatter that flow in one single feed, while conversations by their nature linger around a specific topic and become hard to follow when there are too many people talking. Trying to build a way to fit the two concepts together has foxed the company for a long time now.
At its best, bringing in a new team from the outside will potentially give Twitter a fresh perspective on how to approach conversations on the platform, and the fact that Lightwell has been thinking about creative ways to present narratives gives them some cred as a group that might come up completely new concepts for presenting conversations.
At a time when it seems that the conversation around Conversations had somewhat stagnated, it’s good to see a new chapter opening up.
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SmileDirectClub files to go public amid concerns from dental associations
SmileDirectClub, the at-home teeth-straightening service, is on its way to becoming a public company. SmileDirectClub is seeking to raise up to $100 million in its IPO, according to its S-1 filed today. The number of shares and price range for the offering have yet to be determined.
Prior to this, SmileDirectClub reached a $3.2 billion valuation following a $380 million funding round last October. Investors from Clayton, Dubilier & Rice led the round, which featured participation from Kleiner Perkins and Spark Capital. This funding came on top of Invisalign maker Align Technology’s $46.7 million investment in SmileDirectClub in 2016, and another $12.8 million investment in 2017 to own a total of 19% of the company.
In 2018, SmileDirectClub’s revenues came in at $432.2 million, a significant uptick from just $147 million the year prior.
The company ships invisible aligners directly to customers, and licensed dental professionals (either orthodontists or general dentists) remotely monitor the progress of the patient. Before shipping the aligners, patients either take their dental impressions at home and send them to SmileDirectClub or visit one of the company’s “SmileShops” to be scanned in person. SmileDirectClub says it costs 60% less than other types of teeth-straightening treatments, with the length of treatments ranging from four to 14 months. The average treatment lasts six months.
Though, members of the American Association of Orthodontists have taken issue with SmileDirectClub, previously asserting that SmileDirectClub violates the law because its methods of allowing people to skip in-person visits and X-rays is “illegal and creates medical risks.” The organization has also filed complaints against SmileDirectClub in 36 states, alleging violations of statutes and regulations governing the practice of dentistry. Those complaints were filed with the regulatory boards that oversee dentistry practices and with the attorneys general of each state.
SmileDirectClub explicitly calls out those issues in its S-1 as potential risk factors. Here’s a key nugget:
A number of dental and orthodontic professionals believe that clear aligners are appropriate for only a limited percentage of their patients. National and state dental associations have issued statements discouraging use of orthodontics using a teledentistry platform. Increased market acceptance of our remote clear aligner treatment may depend, in part, upon the recommendations of dental and orthodontic professionals and associations, as well as other factors including effectiveness, safety, ease of use, reliability, aesthetics, and price compared to competing products.
Furthermore, our ability to conduct business in each state is dependent, in part, upon that particular state’s treatment of remote healthcare and that state dental board’s regulation of the practice of dentistry, each which are subject to changing political, regulatory, and other influences. There is a risk that state authorities may find that our contractual relationships with our doctors violate laws and regulations prohibiting the corporate practice of dentistry, which generally bar the practice of dentistry by entities. Two state dental boards have established new rules or interpreted existing rules in a manner that purports to limit or restrict our ability to conduct our business as currently conducted.
Additionally, as the S-1 notes, a national dental association recently filed a petition with the U.S. Food and Drug Administration claiming that SmileDirectClub’s manufacturing violates “prescription only” requirements. While no regulations or laws have been passed that would affect SmileDirectClub to date, it’s a possible scenario that would greatly impact the company’s core business.
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Postmates to drop IPO filing next month
Postmates plans to make its IPO paperwork public in September, TechCrunch has learned. Despite previous reports indicating the on-demand delivery company is seeking an M&A exit, sources close to the matter say Postmates is on track to go complete an initial public offering this year.
With the S-1 dropping in September, San Francisco-based Postmates is expected to debut on the stock exchange by the end of the third fiscal quarter of 2019. The company has tapped JP Morgan Chase and Bank of America Corp. as lead underwriters, Bloomberg previously reported, though other details of the float, including the size and price range of the proposed offering, have yet to be announced.
“We can’t comment on the IPO process and we don’t comment on rumor or speculation,” a Postmates spokesperson told TechCrunch.
In February, Postmates confidentially filed with the U.S. Securities and Exchange Commission for an IPO. Shortly after, Postmates held M&A talks with DoorDash, another food delivery unicorn, according to people familiar with the matter, but failed to come to mutually favorable terms. DoorDash declined to comment for this story.
Postmates has raised $681 million to date with its latest round coming in earlier this year at a $1.85 billion valuation. DoorDash, on the other hand, reached a $12.6 billion valuation in May with a $600 million Series G.
As Postmates gears up for its IPO, the food delivery business continues to consolidate. DoorDash last week purchased another food delivery service, Caviar, from Square in a deal worth $410 million. Uber is said to have considered buying Caviar, which had been looking for a buyer at least since 2016, according to Bloomberg.
DoorDash has been under heavy scrutiny as of late for the way it pays its drivers. Back in February, we reported how DoorDash offsets the amount it pays drivers with tips from customers. It wasn’t until after much backlash that DoorDash finally said it would change its policies. DoorDash has yet to implement the new policy.
How Postmates will fare on the public markets is up for debate. The billion-dollar company will go head-to-head with other public businesses in the space, including powerhouses Uber and Grubhub.
Uber last week shared disappointing second-quarter earnings. The company’s food delivery unit, UberEats, however, continues to grow at an impressive rate. UberEats did $3.39 billion in gross bookings last quarter with monthly active platform consumers (MAPCs) growing more than 140% year-over-year. Still, the unit is years away from profitability, Uber chief Dara Khosrowshahi told CNBC on Thursday.
Postmates’ updated IPO plans follow a report from Bloomberg that WeWork expects to make its IPO prospectus available in the next week. Eyes will be on both WeWork, which hopes to raise more than $3.5 billion, and Postmates, as the companies occupy two unproven categories.
Postmates follows Uber, Lyft, Pinterest and many others to the public markets in 2019, a year when many of Silicon Valley’s most notable unicorns finally decided to make the transition from private to public.
Postmates, founded in 2011 by Bastian Lehmann, is backed by Spark Capital, Founders Fund, Uncork Capital, Slow Ventures, Tiger Global, Blackrock and others.
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Africa’s top mobile phone seller Transsion to list in Chinese IPO
Chinese mobile-phone and device maker Transsion will list in an IPO on Shanghai’s STAR Market, Transsion confirmed to TechCrunch.
The company — which has a robust Africa sales network — could raise up to 3 billion yuan (or $426 million).
“The company’s listing-related work is running smoothly. The registration application and issuance process is still underway, with the specific timetable yet to be confirmed by the CSRC and Shanghai Stock Exchange,” a spokesperson for Transsion’s Office of the Secretary to the Chairman told TechCrunch via email.
Transsion’s IPO prospectus is downloadable (in Chinese) and its STAR Market listing application available on the Shanghai Stock Exchange’s website.
STAR is the Shanghai Stock Exchange’s new Nasdaq-style board for tech stocks that also went live in July with some 25 companies going public.
Headquartered in Shenzhen — where African e-commerce unicorn Jumia also has a logistics supply-chain facility — Transsion is a top-seller of smartphones in Africa under its Tecno brand.
The company has a manufacturing facility in Ethiopia and recently expanded its presence in India.
Transsion plans to spend the bulk of its STAR Market raise (1.6 billion yuan or $227 million) on building more phone assembly hubs and around 430 million yuan ($62 million) on research and development, including a mobile phone R&D center in Shanghai, a company spokesperson said.
Transsion recently announced a larger commitment to capturing market share in India, including building an industrial park in the country for manufacture of phones to Africa.
The IPO comes after Transsion announced its intent to go public and filed its first docs with the Shanghai Stock Exchange in April.
Listing on the STAR Market will put Transsion on the freshly minted exchange seen as an extension of Beijing’s ambition to become a hub for high-potential tech startups to raise public capital. Chinese regulators lowered profitability requirements for the exchange, which means pre-profit ventures can list.
Transsion’s IPO process comes when the company is actually in the black. The firm generated 22.6 billion yuan ($3.29 billion) in revenue in 2018, up from 20 billion yuan a year earlier. Net profit for the year slid to 654 million yuan, down from 677 million yuan in 2017, according to the firm’s prospectus.
Transsion sold 124 million phones globally in 2018, per company data. In Africa, Transsion holds 54% of the feature phone market — through its brands Tecno, Infinix and Itel — and in smartphone sales is second to Samsung and before Huawei, according to International Data Corporation stats.
Transsion has R&D centers in Nigeria and Kenya and its sales network in Africa includes retail shops in Nigeria, Kenya, Tanzania, Ethiopia and Egypt. The company also attracted attention for being one of the first known device makers to optimize its camera phones for African complexions.
On a recent research trip to Addis Ababa, TechCrunch learned the top entry-level Tecno smartphone was the W3, which lists for 3,600 Ethiopian Birr, or roughly $125.
In Africa, Transsion’s ability to build market share and find a sweet spot with consumers on price and features gives it prominence in the continent’s booming tech scene.
Africa already has strong mobile-phone penetration, but continues to undergo a conversion from basic USSD phones, to feature phones, to smartphones.
Smartphone adoption on the continent is low, at 34%, but expected to grow to 67% by 2025, according to GSMA.
This, added to an improving internet profile, is key to Africa’s tech scene. In top markets for VC and startup origination — such as Nigeria, Kenya, and South Africa — thousands of ventures are building business models around mobile-based products and digital applications. 
If Transsion’s IPO enables higher smartphone conversion on the continent, that could enable more startups and startup opportunities — from fintech to VOD apps.
Another interesting facet to Transsion’s IPO is its potential to create greater influence from China in African tech, in particular if the Shenzhen company moves strongly toward venture investing.
China’s engagement with African startups has been light compared to China’s deal-making on infrastructure and commodities — further boosted in recent years as Beijing pushes its Belt and Road plan.
Transsion’s IPO move is the second recent event — after Chinese owned Opera’s big venture spending in Nigeria — to reflect greater Chinese influence and investment in the continent’s digital scene.
So in coming years, China could be less known for building roads and bridges in Africa and more for selling smartphones and providing VC for African startups.
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Bloomscape raises $7.5M to sell you plants of all sizes
Direct-to-consumer plant retailer Bloomscape has raised $7.5 million in Series A funding, with several high-profile D2C startup founders signing on as investors.
Founder and CEO Justin Mast told me that his family has five generations of experience as greenhouse owners and operators, and that he first tried to get Bloomscape off the ground more than a decade ago. Since then, Mast has worked at other startups, but he said, “Bloomscape was the one that got away. I would find myself dreaming about it.”
The current version of the startup launched just over a year ago, and has shipped more than 100,000 plants since then. The company is headquartered in Detroit, and ships plants from its greenhouses near Grand Rapids, Mich.
When asked what’s wrong with the existing brick-and-mortar plant-buying process, Mast said convenience is a big factor, particularly once you start talking about plants that are too big to carry in one hand — he said Bloomscape’s packing and shipping methods can accommodate everything from a 10-inch aloe plant to a five-foot bird of paradise.
Bloomscape also helps people care for their plants through its Plant Mom service, allowing customers to ask for advice from an expert. The Plant Mom is, in fact, Mast’s mother Joyce, who has more than 40 years of horticulture experience.
Mast said the service is designed to replicate his own experience texting his Mom for help when his plants weren’t doing well: “We wanted to figure out how to do this in a way that didn’t feel like tech support, that actually felt convenient, warm and helpful.” (Bloomscape has since hired other experts to support her.)
Mast added that he sees the free service as “this tremendous opportunity to create value,” particularly since “people who feel confident that they’re going to be able to keep their plants alive go and buy more plants.”
Ultimately, Mast’s vision is for Bloomscape to be involved in “plant life in every area of the home and garden.”
The new round was led by Revolution Ventures, with participation from Endeavor, as well as Allbirds co-founder Joey Zwillinger, Away co-founder Jen Rubio, Eventbrite co-founder Kevin Hartz, Harry’s co-founder Jeff Raider, Quora co-founder Charlie Cheever and Warby Parker co-founders Neil Blumenthal and Dave Gilboa.
“Plants are a highly fragmented, fast growing industry, but the market has been slow to come online – warehousing and shipping living things is hard,” Revolution Ventures partner Clara Sieg said in a statement. “Drawing on five generations of horticultural experience, Justin and the Bloomscape team combines the ease of e-commerce with care and maintenance resources in a beautifully branded, consumer-centric experience that empowers even the least green thumbed among us to be successful plant parents.”
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Vacasa to acquire Wyndham Vacation Rentals for $162M
Vacasa, a provider of vacation rental management services akin to Airbnb, has agreed to acquire Wyndham Vacation Rentals from Wyndham Destinations.
Portland-based Vacasa will pay Wyndham a total of $162 million, including at least $45 million in cash at closing and upwards of $30 million in Vacasa equity.
Vacasa, founded in 2009, has raised $207.5 million in venture capital funding to date from investors such as Assurant Growth Investing and NewSpring Capital.
Its acquisition of Wyndham Vacation Rentals will bring a number of brands, including ResortQuest, Kaiser Realty and Vacation Palm Springs, under its ownership and will expand its portfolio to include 9,000 new properties.
“We are excited to partner with the pioneering company in the short-term rental industry that helped make vacation homes popular for so many families around the world,” Vacasa founder and chief executive officer Eric Breon said in a statement. “Combining Wyndham Vacation Rentals’ decades of operational excellence with Vacasa’s next-generation technology will deliver the industry’s best vacation rental experiences.”
The deal comes amid a period of growth for the Oregon business, which says it expects to bring in more than $1 billion in gross bookings and roughly $500 million in net revenue in the next year.
The acquisition, announced this morning, is projected to close this fall.
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WeWork accelerates IPO plans, plots September listing
WeWork chief executive officer Adam Neumann is already rich, but soon all of the early employees and investors of the co-working giant will be too.
The business, now known as The We Company, has accelerated its plans to go public, according to a new report from The Wall Street Journal. WeWork is expected to unveil is S-1 filing next month ahead of a September initial public offering.
WeWork declined to provide comment for this story.
The New York-based company, valued at $47 billion earlier this year, has long been rumored to be plotting a massive IPO. The WSJ reports it’s now in the process of meeting with Wall Street banks to secure an asset-backed loan upwards of $6 billion in what could be an effort to downsize its upcoming stock offering. WeWork disclosed massive 2018 net losses of $1.9 billion in March on revenue of $1.8 billion. To convince Wall Street it’s a business worthy of their investment will be a challenge, to say the least. Seeking capital elsewhere ahead of the IPO manages expectations and ensures WeWork ultimately has the cash it needs to continue its global expansion. Here’s a look at WeWork’s expanding revenues and losses:
- WeWork’s 2017 revenue: $886 million
- WeWork’s 2017 net loss: $933 million
- WeWorks 2018 revenue: $1.82 billion (+105.4%)
- WeWork’s 2018 net loss: $1.9 billion (+103.6%)
WeWork has raised a total of $8.4 billion in a combination of debt and equity funding since it was founded in 2011. Its IPO is poised to become the second largest offering of the year behind only Uber, which was valued at $82.4 billion following its May IPO on the New York Stock Exchange.
WeWork is said to have initially filed paperwork with the U.S. Securities and Exchange Commission for an IPO in December, in part so it was ready to hit the public markets if other avenues for cash fell through. The business is one of several tech unicorns to attract billions from the SoftBank Vision Fund. Recently, the Japanese telecom giant eyed a majority stake in the company worth $16 billion, but scaled back their investment down to $2 billion at the last minute.
WeWork, despite mounting losses, is growing — fast. The company established a 90% occupancy rate in 2018 as membership totals rose 116%, to 401,000.
Still, whether WeWork, backed by SoftBank, Benchmark, T. Rowe Price, Fidelity and Goldman Sachs, will be able to match its $47 billion valuation when it goes public this fall is questionable. Early investors will be sure to see a nice return, but late-stage investors may be nervous about their prospects.
Neumann, for his part, has reportedly cashed out of more than $700 million from his company ahead of the IPO. The size and timing of the payouts, made through a mix of stock sales and loans secured by his equity in the company, is unusual, considering that founders typically wait until after a company holds its public offering to liquidate their holdings.
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Medallia stock up 76% following first day trading on the NYSE
Customer experience management platform Medallia (NYSE: MDLA) rose more than 70% in its New York Stock Exchange debut Friday.
The nearly two-decades-old business priced its shares at $21 apiece, the top of its proposed range, Thursday evening and traded as high as $39.54 the following morning. Medallia closed up roughly 76% at about $37 per share on Friday.
Medallia sold a total of 15.5 million shares in its IPO, raising $326 million at a $2.5 billion valuation in the process.
San Mateo-headquartered Medallia, led by chief executive officer Leslie Stretch, operates a platform meant to help businesses better provide for their customers. Its core product, the Medallia Experience Cloud, provides employees real-time data on customers collected from online review sites and social media. The service leverages that data to provide insights and tools to improve customer experiences.
The company is backed by four venture capital firms: Sequoia Capital — which owned a roughly 40% pre-IPO stake — Saints Capital, TriplePoint Venture Growth and Grotmol Solutions, the latter which invested a small amount of capital in 2010. Medallia has raised a total of $268 million in equity funding, including a $70 million Series F funding earlier this year.
Sequoia’s 40% stake was worth upwards of $1.8 billion at Medallia’s high price Friday.
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