Zuora Enters the Market With a Bang

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Zuora Inc. (NYSE: ZUO) entered the market with a bang on Thursday. The firm originally priced its shares at $14, just above its expected price range of $11 to $13. However, it actually entered the market at $20 per share, easily notching a 40% gain off the bat.

The firm offered 10 million shares, with an overallotment option for an additional 1.5 million shares. At the $14 price, the entire offering was valued up to $131 million.

The underwriters for the offering are Goldman Sachs, Morgan Stanley, Allen, Jefferies, Canaccord Genuity and Needham.

Simply put, this company provides cloud-based software on a subscription basis that enables any company in any industry to successfully launch, manage and transform into a subscription business.

In a recent SEC filing, the firm detailed:

We currently serve more than 950 customers in over 30 different countries across most industries, including 15 of the Fortune 100 as of January 31, 2018. Unsurprisingly, customers pay for our platform under a subscription-based model, and this model allows us to grow as the Subscription Economy grows. For fiscal 2016, fiscal 2017, and fiscal 2018, our total revenue was $92.2 million, $113.0 million, and $167.9 million, respectively. We have made significant investments to grow our business, including in sales and marketing, infrastructure, operations, and headcount. As a result, we incurred net losses for fiscal 2016, fiscal 2017, and fiscal 2018 of $48.2 million, $39.1 million, and $47.2 million, respectively.

Zuora intends to use the net proceeds from this offering for working capital and other general corporate purposes, including research and development and sales and marketing activities, general and administrative matters, and capital expenditures.

Shares of Zuora were last seen up 49% at $20.86, with a range of $19.12 to $21.00 on the day thus far. Also over 6 million shares have moved as of 11 a.m. Eastern.

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