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Investors may be wary about the shares of companies peddling software that runs in the cloud, but you wouldn’t know it from today’s IPO debut of Zendesk.
Shares of the cloud-based customer support company priced at $9 a share Wednesday and promptly rose by nearly 44 percent to $13 by the early afternoon. Its IPO filing with the U.S. Securities and Exchange Commission first became public last month.
The IPO price valued Zendesk at about $632 million, but after the pricing pop, its market cap rose to north of $910 million. It raised about $100 million in the offering. It debuted on the New York Stock Exchange with the trading symbol ZEN.
Zendesk’s biggest shareholder is venture capital firm Charles River Ventures, which holds a 24.5 percent stake. The firm led Zendesk’s 2009 Series A funding. Benchmark Capital is the No. 2 shareholder, with a stake amounting to nearly 19 percent. Benchmark’s Peter Fenton led a $6 million B round and sits on Zendesk’s board. Matrix Partners owns nearly nine percent. CEO Mikkel Svane and Chief Product Officer Alexander Aghassipour each control a little more than seven percent of the company’s shares.
Zendesk has more than 40,000 corporate customers that use its service as the backbone of their customer support efforts. Those customers include startups like Airbnb and Dropbox but also more established companies like Adobe.
Lately the shares of cloud software companies have fallen from recent highs over investor worries about their high valuation metrics and overall lack of profitability.
In a brief interview this morning, I asked Svane whether he thought there’s a bubble mentality around cloud stocks. He diplomatically dodged the question. “It’s hard for me to answer that,” he said. “But I know we are very prepared and ready to be a public company now. We feel good about the decision and think it was the right thing for us to do.”
For its part, Zendesk ran a net loss of $22.6 million on revenue of $72 million in 2013, according to its regulatory filings.
Svane also appeared on CNBC from the NYSE.
This article originally appeared on Recode.net.
