Nutanix Raises $238 Million in IPO

Comments

Nutanix first filed for an IPO in December 2015 for an aggregate offering price of $200 million, and once more in April 2016, to finally debuted it on September 30, 2016 on the NASDAQ under the symbol NTNX.

Stock opened the day at $26.50, valuing the San Jose, CA-based company at $3.6 billion. At the closing bell, shares were priced at $37, a 131% pop from the $16 IPO price. Nutanix sold 14.87 million shares last Thursday, more than the expected 14 million, and priced them above the expected range of $13 and $15, to raise about $238 million.

It was the largest tech IPO this year, and the 6th VC-backed tech IPO in the US in 3Q16.

It seems a great success, but not really for the start-up's VCs. $238 million is far from $370 million invested in the company:

Financial funding:

• • $15.5 million in 2010
• • $25.3 million in 2011
• • $33.0 million in 2012
• • two rounds in 2014, $151.5 million and $145.0 million

Total: $370.3 million

In April 2016, the firm issued an aggregate principal amount of $75.0 million of senior notes due April 15, 2019

Principal stockholders:

• • Lightspeed Venture Partners 22.4%
• • Jeffrey T. Park 22.4%
• • Khosla Ventures 10.6%
• • Dheeraj Pandey 9%
• • Mohit Aron 8.6%

If you look at the 32 IPOs in the storage industry since 1995 (see the bottom of this page), the average amount raised reached $128 million; it's more than $111 million, the average total funding. For two of the former storage IPOs last year, Pure Storage raised $470 million compared to $425 million put by investors. It's $83 million and $73.5 million for Mimecast, respectively.

Incorporated in the State of Delaware in September 2009, Nutanix came out of stealth mode in August 2011 with the Complete Cluster, one of the first hyperconverged storage products rebranded as the Virtual Compute Platform in June 2013. This platform delivers enterprise data storage as an on-demand service by employing a distributed software architecture eliminating the need for traditional SAN and NAS, and delivers a set of software-defined services that are VM-centric, including snapshots, high availability, disaster recovery, de-dupe.

The solution is comprised of two software, Acropolis and Prism, and is delivered on commodity x86 servers. Acropolis delivers high performance distributed storage, application mobility capabilities and a built-in hypervisor, software that allows multiple OSs to share a single hardware host. Prism delivers integrated virtualization and infrastructure management, operational analytics and administration capabilities. The solutions is dedicated to a range of workloads, including enterprise applications, databases, virtual desktop infrastructure, or VDI, unified communications and big data analytics and the company has recently announced the capability to support both virtualized and non-virtualized applications.

The hardware NX-3000 Series is comprised of several nodes of commodity x86 servers with dual-core Intel Haswell processor with SSDs and HDDs, and 1GbE or 2GbE connections. Components are generally purchased through Super Micro.

Competitors include software providers such as VMware and Red Hat, as well as IT systems vendors such as HPE, Cisco Systems, Lenovo, Dell EMC, HDS, IBM and NetApp, Nimble Storage, Pivot3, Pure Storage and SimpliVity.

Average total end-customer growth is approximately 22% on a quarterly basis over the last eight fiscal quarters, which grew from 782 as of July 31, 2014 to 3,768 as of July 31, 2016. There were 657 new ones acquired during the three months ended July 31, 2016. Among the customers, there are many Global 2000 enterprises and they include Activision Blizzard, Inc., Best Buy Co., Inc., Covance Inc., Jabil Circuit, Inc., Kellogg Co., Nasdaq, Inc., Nintendo Co., Ltd., Nordstrom, Inc., NTT SmartConnect Corporation, Total S.A., Toyota Motor of North America, U.S. Department of Defense Office of the Secretary of Defense and Yahoo! JAPAN Corporation.

For last known financial quarter, distributors Carahsoft and Promark represented 15% and 20% of total revenue, respectively.

Now with 1,980 employees worldwide, Nutanix grew very fast. Average revenue growth of 17% on a quarterly basis was recorded for the last eight fiscal quarters, which grew from $46.1 million in the three months ended October 31, 2014 to $139.8 million in the three months ended July 31, 2016.

But the company has a perpetual history of growing losses, never was and being far to be profitable. As of July 31, 2016, it has an accumulated deficit as high as $441.9 million.

Revenue and profitability for FY Ended July 31
(in $ thousand)

Revenue and profitability for the quarter ended July 31, 2016
(in $ thousand)

Support and services is only 22% of total sales compared to 78% for products in the last three-month financial period.

Revenue's repartition by region for FY ended July 31, 2016

Remember that Nutanix acquired last August Calm.io, a company based in Singapore which specializes in container and DevOps automation, for 0.5 million shares of class B common stock and $1.2 million of cash, and, one month later, PernixData, in scale-out data acceleration and analytics, for only $9.7 million, according to Forbes.

Total compensation of main executives in 2015 and 2016

32 IPOs in storage industry

* in $ million
** became public via a merger with Network Peripherals
(Source: StorageNewsletter.com)

Read also:
Nutanix Stalled IPO Might Soon Be Back on
Last valued at $2 billion
2016.09.16 | In Brief
Nutanix Raises $75 Million Debt
Continues to work on its long awaited IPO.
2016.06.06 | In Brief
Nutanix Once More Filing for IPO
Of shares of class A common stock
by Jean-Jacques Maleval | 2016.04.11 | News
Nutanix Differs IPO
Until stock market volatility wanes, said CNBC sources
2016.03.02 | In Brief
Facts and Figures on Nutanix
$2 billion start-up supposed to raise $200 million in IPO
by Jean-Jacques Maleval | 2015.12.29 | News | [with our comments]
Nutanix Files Registration Statement for IPO
Aggregate offering price: $200 million
2015.12.23 | Press Release