Snowflake Poised to Price IPO Above Expected Range With Valuation Topping $30 Billion -- Update
September 15 2020 - 3:14PM
Dow Jones News
By Corrie Driebusch
Silicon Valley darling Snowflake Inc. is poised to price its IPO
above its expected range on Tuesday, people familiar with the
matter said, joining a frenzied initial-public-offering market as
the biggest technology issue so far this year.
Strong demand for shares of the company, which offers businesses
cloud-based data management, means it could price around $120 a
share, people familiar with the matter said. That is above its
expected price range of $100 to $110 a share. Investor hunger for a
piece of a company growing at such a fast rate has pushed that
price even higher, and the IPO is now likely to price above
that.
If the company, which offers businesses cloud-based data
management, prices its deal above range, its valuation would top
$30 billion. That is more than double the $12.4 billion valuation
Snowflake reached in a private funding round earlier this year, a
sign of the enthusiasm surrounding U.S.-listed IPOs in 2020.
The stock is set to begin trading on the New York Stock Exchange
under the symbol SNOW on Wednesday.
Snowflake joins a flood of companies racing to the public
markets this year. Through the end of last week, companies listing
in the U.S. have raised more than $78 billion in their IPOs, on
pace for one of the biggest money-raising years for new issues
since the tech boom of 2000, according to Dealogic.
Snowflake, one of the most hotly anticipated tech offerings of
the year among software and cloud-data investors, epitomizes the
hunger among investors for the growth that IPOs tend to promise.
With interest rates near historical lows and the Federal Reserve
pouring trillions of dollars into the economy, investors are
seeking places to put their money where they can get better
returns.
In its last fiscal year ended in January, Snowflake's revenue
grew 174% from the year before, according to a regulatory filing.
Its net loss also grew during that period, and Snowflake remains
unprofitable.
Adding to the hype: Warren Buffett's Berkshire Hathaway Inc. has
agreed to make a concurrent $250 million investment in Snowflake,
alongside current investor Salesforce Ventures LLC, Salesforce.com
Inc.'s corporate investment arm, which has also pledged $250
million.
Snowflake raised its expected price range Monday, saying it now
aims to sell 28 million shares at $100 to $110 apiece, according to
a regulatory filing. With a valuation of more than $30 billion,
Snowflake would be the second-largest company to go public in 2020
after Quicken Loans parent Rocket Cos., according to data provider
Dealogic.
The San Mateo, Calif.-based company's data warehouse allows its
corporate customers to share data across multiple online storage
systems.
Snowflake is run by Chief Executive Frank Slootman, who is no
stranger to the IPO process. In the past, he successfully steered
software firm ServiceNow Inc. and data-solutions company Data
Domain Inc. through IPOs when he served as CEO of each.
Goldman Sachs Group Inc. and Morgan Stanley are leading
Snowflake's offering.
Write to Corrie Driebusch at corrie.driebusch@wsj.com
(END) Dow Jones Newswires
September 15, 2020 14:59 ET (18:59 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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