Cloudera IPO falls short of market expectations

By:
Bill Boyle
Published on:

Cloudera has announced that its expected IPO price will fall considerably below the market’s expected valuation at between $12 and $14 per share

On Monday Cloudera, the Open Source big data company, said that its Initial Public Offering (IPO) of 15million shares on the New York stock exchange would value the company at between $2.2 billion to $2.4 billion.

While this would still leave the company ahead of the valuation of its nearest publicly-traded rival, Hortonworks, this is a great disappointment to those who expected the Intel acquisition to top £4 billion. However, this was immediately after the Intel deal so there should be no surprise that the company has not advanced too much since then.

What is a surprise is that the estimated valuation has been pitched at such a low figure despite Intel announcing that it would purchase a maximum of 10% of the shares at IPO.

Recent growth figures give hope to investors since the company’s revenues for the last fiscal year were $261 million - which was growth of 57% on the previous year.

According to the Wall Street Journal, the declining valuation points to the larger recent disconnect between private and public market valuations. Cloudera’s high burn rate does not help matters said financial analysts.