Cloud backup service Backblaze climbed 24% in its Nasdaq debut on Thursday and 12% on Friday, after raising $100M in its IPO, giving it a market cap of ~$650M
- Backblaze went public this week after generating just $16 million in revenue in the second quarter.
Context & Ripple Effects
Backblaze's debut extends a decade-long pattern of cloud companies opening sharply above their IPO price: Box closed up over 65% on its first day in 2015, Dropbox opened up ~40% in 2018, and Cloudflare rose more than 27% in 2019. What distinguishes Backblaze is scale — a ~$650M market cap and $16M in second-quarter revenue make it the smallest of this cohort by far.
The timing matters too: Braze jumped 44% in its own Nasdaq debut days later in the same November 2021 window, suggesting back-to-back strong receptions for software names rather than a one-off.
First-order effects
- Backblaze converts a $100M raise into public-market currency while trading at roughly 10x its quarterly revenue run-rate, giving it listed stock to use for hiring and infrastructure without another private round.
- Its pre-IPO backers now hold liquid shares marked up 24% plus 12% over two sessions, against a company still generating modest revenue.
Second-order effects
- The back-to-back pops from Backblaze and Braze signal an open IPO window for cloud and software issuers, lowering the bar for other private infrastructure companies to file.
- Competitors in low-cost cloud storage now face a publicly funded rival whose cost position can be scrutinized — and financed — through quarterly disclosures.
Third-order effects
- If the pattern holds across Box, Dropbox, Cloudflare, and Backblaze, systematic first-day underpricing persists as a structural feature of cloud IPOs, transferring initial upside to allocated investors rather than issuers.
- Public markets keep accepting small-revenue infrastructure businesses, which pushes the sector toward earlier listings and thinner financial cushions at the moment of going public.
The trend: Cloud infrastructure companies continue to time IPOs into receptive windows and open far above their offer price, with each successful small-cap debut like Backblaze widening the aperture for the next issuer.