Software Maker Confluent Jumps 25% After $828 Million IPO

Data infrastructure software maker Confluent Inc. climbed 25% in its trading debut after raising $828 million in a U.S. initial public offering priced above a marketed range.

The Mountain View, California-based company’s closed at $45.02 each in New York trading Thursday, giving it a market value of about 11.4 billion. Confluent sold 23 million shares for $36 each on Wednesday after marketing them for $29 to $33.

Accounting for employee stock options, the company’s diluted value is closer to $15 billion. Confluent was last valued at $4.5 billion in a funding round last year, according to a company statement.

Founded in 2014 by Jay Kreps, Jun Rao and Neha Narkede, Confluent has more than 2,500 customers, which use its platform to organize and manage data.

“We considered both a direct listing and an IPO,” Kreps, who is chief executive officer, said in an interview. “For us, we want to be able to raise capital as part of the process to fund future growth.”

Confluent’s biggest shareholders include Benchmark Capital, Index Ventures and Sequoia Capital, as well as Kreps and Rao, according to its filings.

Board member Mike Volpi, a partner at Index Ventures, said the IPO proceeds will be used for hiring as well as potential acquisitions.

“The market will probably consolidate at some point,” Volpi said, describing how data companies fall into one of three categories.

“You either store it, you compute against it, or you’re moving it from one place to another,” he said, adding that Confluent stands out in the data movement area.

Confluent reported a net loss of $44.5 million on revenue of $77 million in the first quarter, compared with a $33.6 million loss on $51 million in revenue during the same period in 2020.

The offering was led by Morgan Stanley, JPMorgan Chase & Co. and Goldman Sachs Group Inc. Confluent’s shares are trading on the Nasdaq Global Select Market under the symbol CFLT.

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