Duck Creek Rises in Debut After Expanded $405 Million IPO

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Duck Creek Technologies Inc., a software provider for insurers, climbed 48% in its trading debut after raising $405 million in an initial public offering priced above the targeted range.

The Boston-based company’s shares closed at $40 apiece Friday in New York trading, giving the company a market value of about $5.2 billion. On Thursday it sold 15 million shares for $27 each after marketing them for $23 to $25 each.

After a spring lull in IPOs amid the uncertainty and volatility brought on by the coronavirus pandemic, issuers and bankers aren’t taking much of a summer break. Less than halfway through the month, companies, including so-called blank-check companies, have raised $9.7 billion in U.S. IPOs. That’s busier then the entire month of August for every year since 2000, when $10.3 billion was raised, according to data compiled by Bloomberg.

Duck Creek’s debut share jump was overshadowed by vaccine maker CureVac NV, which surged 249% for the biggest first-day gain for a U.S. listing this year, the data show.

There are more deals to come. Airbnb Inc., the most anticipated listing of the year, plans to file for an IPO within weeks and could go public this year after posting better than expected second quarter results, Bloomberg News reported. Palantir Technologies Inc., the secretive data analysis software company, is eying a direct listing in late September.

Duck Creek’s backers include Apax Partners, as well as Accenture, Dragoneer Investment Group and Insight Venture Management.

Loss Shrinks

For the nine months ended May 31, Duck Creek lost $8.5 million on revenue of $153 million, according to its filings. That compared with a loss of $14 million on $123 million in revenue for the same period in 2019.

Chief Executive Officer Michael Jackowski said insurance industry employees working from home during the the coronavirus pandemic has elevated software as a service, specifically the need for carriers to provide access to data and systems.

”We’re in the early innings for the insurance sector to migrate to Saas” Jackowski said in an interview. “As a whole the industry remained quite strong. It’s very well capitalized.”

Goldman Sachs Group Inc. and JPMorgan Chase & Co. led the offering. Duck Creek’s shares are trading on Nasdaq Global Select Market under the symbol DCT.

©2020 Bloomberg L.P.

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