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New Relic and Hortonworks Surge in Big Data IPOs

Two big pops for companies backed by the venture capitalist Peter Fenton.

Tech IPOs are back. New Relic and Hortonworks, two software companies riding different rails of the “big data” trend in enterprise computing, both made strong Wall Street debuts Friday, joining a conga line of high-profile public offerings that, this week, includes Lending Club and Chinese social network Momo.

New Relic, which makes cloud-based software for analyzing the performance of software and websites, raised $115 million with its offering. Priced at $23 a share, the company’s stock had spiked 44 percent to $33.02 on the New York Stock Exchange at the time of this writing.

Hortonworks — which helps companies deploy, manage and analyze corporate data using the open source software platform Hadoop — priced its offering at $16 a share. By 12:50 pm ET its stock was trading at $22.24 on the Nasdaq, an increase of about 39 percent.

The first-day gains posted by New Relic and Hortonworks made for a big day for the venture capitalist Peter Fenton, who led Benchmark’s investments in both companies. Benchmark holds a 22 percent stake in New Relic and a 19 percent stake in Hortonworks. Each company was valued at about $1 billion as their offerings priced.

Another beneficiary of the Hortonworks IPO pop: Yahoo. The company’s 17 percent stake is now worth about $170 million.

New Relic — the name is an anagram of the name of CEO Lew Cirne — is a cloud-based service that monitors and troubleshoots software application performance. Earlier this year, it was used to help find and fix problems with the U.S. Government’s website. The company recently added the ability to track and analyze business data — the mouse clicks and buying habits of customers, for example — on websites, giving users the ability to gather data not just about software, but about the state of a business.

“Our customers want to ask both technical and business questions with our applications, and we make it easy for them to do both,” Cirne said in a brief interview with Re/code. “Now that we’re a public company, the opportunity is only going to get bigger.”

Hortonworks helps companies use Hadoop, an open source software technology used to manage and analyze vast troves of corporate data often distributed across many computers. It is currently one of four such ventures in a very competitive space. Rivals like Cloudera and MapR have raised more than $1 billion in combined investments from companies like Intel. A fourth Hadoop company, Pivotal, is a division of technology giant EMC.

A big question hovering over Hadoop is whether or not businesses can actually gain meaningful insight from the data it generates. That will be a focus for Hortonworks CEO Rob Beard in the coming year. In a short interview from the Nasdaq market site in New York, he said the coming year will be “all about making sure we can get business value from everything we do from a technical standpoint. Now that we’re public, we’re eager to get home and get back to work.”

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