Nutanix closes up 131% on its first day of trading after raising $238M in an IPO, now valued at around $5B
Marisa Kendall / Mercury News :
Context & Ripple Effects
Nutanix's debut closes an arc that began when it filed to go public in December 2015 and sharpened three weeks ago, when it set an $11-to-$13 price range targeting just $209M at up to a $1.8B valuation — below its last reported private mark of $2B from 2014. The final pricing at $4.05B already doubled that range, and the 131% first-day close to roughly $5B is the market's verdict on the updated filing showing revenue of $444.9M, up 84% YoY, billings up 106%, against a $165M operating loss.
First-order effects
- Nutanix banks $238M in fresh capital at a ~$5B market value, giving it a public currency and runway while still posting a growing operating loss; employees and pre-IPO holders see immediate paper gains on the pop.
Second-order effects
- The gap between the $1.8B target valuation and the ~$5B close puts the underwriters' conservative pricing under scrutiny and hands other hypergrowth, loss-making infrastructure vendors evidence that public buyers will pay for billings growth over GAAP profitability.
Third-order effects
- If the pattern holds, the door reopens for enterprise-infrastructure IPOs priced on growth metrics rather than profits — shifting the listing calculus for private companies that had stayed private rather than face profitability demands.
The trend: Public markets are once again rewarding unprofitable, fast-growing enterprise infrastructure companies, repricing them far above their last private valuations on the strength of billings growth.