All IPOs in Storage Industry

An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance. An IPO allows a company to raise capital from public investors. The transition from a private to a public company can be an important time for private investors to fully realize gains from their investment as it typically includes a share premium for current private investors. Meanwhile, it also allows public investors to participate in the offering.

It’s an expensive operation as it costs several millions of dollars do do it, notably to pay to get financial advisors, and it’s generally applied on Nasdaq for the storage firms.

It also obliges the start-up to reveal with precision about all its financial figures, not an obligation for a US private firm.

The highest amount IPO in term of amount raised from a storage start-up was Dropbox with $$1.7 billion in 2018 in front of Cloudera just above $1 billion.

Generally this amount is superior to the total funding, but it’s not always the case, meaning not a great operation for the initial investors and founders.

For all the IPO with figures known (41 firms), global amount raised reached $7.8 billion since 1995, or an average of $190 million. Per comparison, total amount invested with figures known (31) reached less than half of that, $3.6 billion, or an average of $116 million. Note that, after being public, several companies were finally acquired by bigger firms, and few of them disappeared.

2007 was the best year in number of IPOs with 6. We counted 3 last year, 2 in 2020, and no one in 2019. It’s slowly decreasing as there are less start-ups with really disturbing storage technology and we expects that this trend will continue this year.

Nevertheless, to get more money to finance the growth of young companies, IPO seems a more lucrative way than an acquisition and main executives generally keep their leadership positions.

43 IPOs IN STORAGE INDUSTRY

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