Anaplan’s IPO Is Strong Out The Gate

Anaplan, the maker of cloud-based software aimed at helping companies with their business planning, surged in its first day of trading as a public company late last week, becoming the latest software as a service company to have a successful initial public offering.

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After raising its IPO price range to between $15 and $17 a share, the stock surged, closing 43% higher. It ended its first day as a public company at $24.30 a share, giving Anaplan a nearly $3 billion market capitalization. All told, it raised $263.5 million in the offering selling the stock at $17 a share. The success on the part of Anaplan comes amid a downdraft in technology stocks, with the Nasdaq hitting its lowest level since May last week. That didn’t deter Anaplan from going public with its Chief Executive Frank Calderoni telling CNBC the company is seeing strong demand and that it has close to 1,000 customers, some of which have tens of thousands of users. He said the malaise in the tech sector wasn’t even a consideration. Anaplan’s IPO did benefit from a market rally Friday (October 12) when it made its public debut.  

Anaplan joins a list of SaaS companies that have had strong IPOs so far in 2018. Earlier this month Elastic, the search startup’s stock soared as much as 106% in its first day of trading. It too came as the markets were down with Elastic raising $252 million in its IPO. Elastic’s search product is open-sourced and downloadable for free, allowing companies to search structured and unstructured data including forms, websites, and databases. But it’s not just Anaplan and Elastic that have had strong public market debuts this year. Since going public in late April, DocuSign’s stock has gained more than 10% while SmartSheet’s stock is 36% higher since it’s April IPO.

Anaplan IPO Comes Amid Management Shake-Ups

Anaplan’s IPO isn’t the only new thing happening at the San Francisco-based startup. Its Chief Executive Calderoni joined the company in January of 2017, leaving his role as Chief Financial Officer for Red Hat. Meanwhile Chief Revenue Officer Steven Birdsall joined Anaplan in late February of 2018. The company's newest appointment is Chief Financial Officer Dave Morton. He came on board in early September, after lasting a few weeks as the chief accounting officer at Tesla. His time at Tesla came as the green car maker was reeling from a Securities and Exchange Commission investigation into Tweets made by CEO Elon Musk. The outspoken leader of Tesla took to Twitter to announce a $420 a share go-private deal, claiming to have funding in place. With no evidence to back it up, the SEC fined Tesla and called for the removal of Musk as CEO. Morton has been quoted in the press as saying his short stint at Tesla was frustrating because no one heeded his advice.

Anaplan has been around since 2008, competing against the likes of IBM and Oracle. It had revenue of $109.4 million for the first half of the year, which was a 41% year-over-year increase.  Anaplan isn’t in need of cash. When filing to go public with the SEC, it said the aim was to boost its financial flexibility so it can pursue its vision for the company. That could include some deal making. While it said it didn’t have specific planned uses for the proceeds it did say it may make investments and buys.