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?