After a price of $ 27 per share, Datto has Stocks rose during regular trading. By the afternoon, the data and security software company was valued at $ 28.10, up over 4%.
The company's initial public offering is based on a rapid third quarter that saw a variety of technology companies, especially software, hit the public market. While the number of untrodden unicorns in the United States rose in the quarter, the third quarter brought a wave of liquidity that was a long time coming.
Datto's IPO belongs to a smaller Q4 tier, though offerings like Airbnb and Affirm will still be available soon. Airbnb and Affirm each announced that they have privately filed a float application but have not yet publicly dropped their S-1 registrations.
Datto's IPO was interesting for a number of reasons, including the mix of slower growth and increasing profitability, its place in the middle of the current Vista drama, and its pricing.
While 2020 saw many venture-backed IPOs, the year also saw a near-fair number of complaints about the IPO process itself. After many tech and tech companies shot up their values in terms of pricing and listing, tech and venture figures argued that company IPOs were effectively passed down to the underwriting banks and their customers.
The arguments had some value. Datto won't start similar fires, however. Just a few points away from its IPO price, the price was pretty much perfect for raising as much cash for yourself as possible on its debut.
Datto will use its IPO proceeds to pay off debt incurred during the Vista acquisition (private equity: a good deal for private equity). Tim Weller, CEO of Datto, told theinformationsuperhighway in a call that the company will continue to be well capitalized after the public offer and that it will have a very strong cash position.
The company should have places where it can use its remaining money. In its S-1 filing, Datto highlighted a COVID-19 tailwind coming from companies accelerating their digital transformation efforts. theinformationsuperhighway asked the company's CEO if this story had an international component and if digital transformation efforts were accelerating globally, not just domestically. In good omen for startups that are not based in the US, the executive said it was.
The company did not have a public debut led by SPAC. Datto's founder Austin McChord said his company had long planned a traditional public offering. McChord closed the Vista front, saying that the removal of Brian Sheth from Vista was immaterial to Datto's IPO process.