Zendesk sets IPO price range between $8 and $10 a share
Zendesk does not seem to be spooked by the same market conditions that caused Box to delay — The market has not been too kind fo cloud companies in the last few months. Just ask Box about that.
Context & Ripple Effects
Zendesk's path to this filing has been deliberate: it raised $60 million from Redpoint, Index Ventures, GGV Capital and Goldman Sachs back in September 2012 explicitly to prepare for an IPO, then in January 2014 hired bankers for the offering, positioning itself within the wave of cloud-software companies heading toward public listings.
The timing is the story's tension. Box has delayed its own IPO amid unfavorable conditions for cloud stocks, so Zendesk setting an $8–$10 range is effectively a bet that demand exists even in a cooled market. The pickup across the New York Times, Wall Street Journal, VentureBeat and regional business journals shows how closely the offering is being read as a temperature check for the whole sector.
First-order effects
- Zendesk's early backers — Redpoint, Index Ventures, GGV Capital and Goldman Sachs — are now on a defined path to liquidity after holding since the 2012 round, with the $8–$10 range implying a deliberately modest valuation for a company of its profile.
Second-order effects
- Box faces renewed pressure: if Zendesk's offering prices and trades well, the case that Box's delay was overcautious strengthens; if it stumbles, Box's wait-and-see posture looks vindicated.
Third-order effects
- A successful listing would give public-market investors their clearest read yet on cloud-software multiples coming out of the 2014 cooldown, shaping whether the pipeline of private SaaS companies behind Zendesk rushes to file or keeps waiting.
The trend: Cloud-software companies are testing whether public markets will price subscription businesses rationally again, with each IPO serving as a referendum on the sector.