Data infrastructure software maker Confluent closes up 25% on its first day of trading, after raising $828M in its US IPO
with third co-founder Neha Narkhede not far behind. https://www.forbes.com/... Alex Konrad / @alexrkonrad : One twist to Confluent's IPO: VC firm Benchmark holds a stake now worth more than $1.5 billion. So did @bgurley call to push a direct listing? No, says CEO @jaykreps — who is still an advocate for traditional IPOs for tech companies looking to raise $$. https://www.forbes.com/...
Context & Ripple Effects
Confluent's debut caps a two-year valuation climb: a $125M Series D in early 2019 at $2.5B, a $250M Series E in April 2020 at $4.5B, and then a confidential IPO filing this spring. The deal itself overshot its own paperwork — the June filing targeted $759M at a ~$8.3B valuation, but Confluent priced and raised $828M at roughly $9B, double last year's private mark.
The pop matters beyond the number because of who was watching: CEO Jay Kreps used the moment to defend the traditional IPO against the direct-listing camp inside his own cap table, denying that Benchmark's Bill Gurley had lobbied for one. Four years on, the trade looks vindicated — IBM agreed to buy Confluent for ~$11B in cash.
First-order effects
- Benchmark's stake is now worth more than $1.5 billion, converting a venture position into liquid public equity on day one.
- Confluent banks $828M in primary capital at a ~$9B valuation while co-founders Jay Kreps and Neha Narkhede hold publicly marked stakes.
Second-order effects
- Kreps's public case for traditional IPOs gives every data-infrastructure founder a counterargument to Benchmark-style direct-listing advocacy, making the listing-method choice an explicit governance question rather than a default.
- The 25% first-day jump signals public buyers will pay well above the last private mark for Kafka-based streaming infrastructure, pressuring rivals to accelerate their own listings before the window reprices.
Third-order effects
- The arc from open-source Apache Kafka project to $2.5B private rounds to a ~$11B cash sale by IBM sketches the consolidation endpoint for open-source infrastructure companies: go public to fund scale, exit to a strategic acquirer once the category matures.
- If the traditional-IPO-versus-direct-listing split keeps resolving toward priced deals that raise real capital, direct listings may stay confined to companies that genuinely need no primary raise.
The trend: Open-source data infrastructure companies are moving through public markets at steep premiums to their private marks, with strategic acquirers like IBM waiting at the end of the cycle.