By Dave Sebastian and Corrie Driebusch 

Snowflake Inc.'s shares made their debut at $245 a share on their first day of trading, more than double the IPO price, giving the biggest tech initial public offering of the year a valuation of $67.9 billion and fueling the enthusiasm surrounding IPOs.

The data-warehousing company priced its IPO of 28 million shares at $120 a share on Tuesday. Wednesday's ascent means the company is now valued at more than five times the $12.4 billion valuation it notched in a private funding round in February of this year.

The IPO raised roughly $3.4 billion for Snowflake, not including the overallotment option, which allows underwriters to buy additional shares. That total also doesn't include the concurrent investments of $250 million apiece pledged by Berkshire Hathaway Inc. and Salesforce Ventures LLC. The company said it plans to use proceeds to fund its operations and potentially make acquisitions.

Based on its IPO price, the Silicon Valley darling was valued at roughly $33.3 billion, making it the second-largest company to go public in 2020, according to Dealogic, after Quicken Loans parent Rocket Cos. Investors, eager for a piece of the fast-growing company, drove Snowflake's IPO price up from the company's original target of $75 to $85 a share.

Frank Slootman, Snowflake's chief executive, is no stranger to the IPO process. He successfully steered software company ServiceNow Inc. and data-solutions company Data Domain Inc. through IPOs when he served as CEO of each.

Hunger for growth in a low-interest-rate environment and a shift of favor toward technology companies have helped fuel significant demand for IPOs. Snowflake is one of the most hotly anticipated tech offerings of the year among software and cloud-data investors.

Companies listing in the U.S. raised more than $78 billion in their IPOs through the end of last week, on pace for one of the biggest money-raising years for new issues since the tech boom of 2000, according to data provider Dealogic. The IPO market was restrained earlier this year due to the Covid-19 pandemic. Investors, faced with interest rates near historic lows and the Federal Reserve pouring trillions of dollars into the economy, later sought to put their money where they can get better returns.

Snowflake, based in San Mateo, Calif., offers businesses cloud-based data management, and corporate customers can share data across multiple online storage systems using the company's data warehouse. It had more than 3,000 customers as of July 31, according to its securities filing.

For the six months ended July 31, the company posted a loss of $171.3 million on revenue of $242 million, which more than doubled from the year-ago period. Its loss for the fiscal year ended Jan. 31 nearly doubled to $348.5 million from the previous year, though revenue almost tripled to $264.7 million.

Write to Dave Sebastian at dave.sebastian@wsj.com and Corrie Driebusch at corrie.driebusch@wsj.com

 

(END) Dow Jones Newswires

September 16, 2020 13:09 ET (17:09 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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