Marketo IPO Priced

As a follow up to the Notes from the Marketo S-1 IPO Filing, Marketo priced their IPO at $13/share earlier today. At the $13/share price, Marketo has an enterprise value of $435 million and a market cap of $540 million (the enterprise value plus cash on hand). Of course, the stock is likely to have a nice run up tomorrow when the markets open due to the high demand for fast-growing Software-as-a-Service companies.

Here are a few thoughts and some speculation:

  • Raising $107 million in venture capital and having an enterprise value of $435 million at time of IPO feels low
  • With an $80 million run rate, and a fast growth rate, my guess is that the stock goes up 20 – 30% tomorrow (~$17/share)
  • Existing investor Battery Ventures bought 500,000 more shares at the IPO price, showing a belief that the stock has significant upside (source)
  • Within 18 months a large tech company will buy the company for north of a billion (e.g. Adobe, Salesforce.com, SAP, etc)

It’s great to see that Marketo successfully went public and further validated the marketing automation space. I look forward to tracking their progress.

What else? What are your thoughts on Marketo going public and their future?

2 thoughts on “Marketo IPO Priced

  1. If its likely to get acquired after going public, why not acquire it before the IPO? Wouldn’t the acquirer would have to pay less price if they acquire before the IPO?

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