Cloud company Veeva’s shares nearly double in debut to $5 billion on $129.5 million in revenue and $18.8 million in profit; Instead of building a generic cloud offering, Gassner decided to build what he calls the “Industry Cloud”, focusing on the healthcare industry

October 17, 2013 Leave a comment

Cloud company Veeva’s shares nearly double in debut

11:37am EDT

(Reuters) – Veeva Systems Inc shares nearly doubled in their market debut on Wednesday, underscoring strong demand for cloud-based software makers with niche technologies and healthy revenue. Veeva’s share price touched a high of $39.64 on the New York Stock Exchange, valuing the company at nearly $5 billion.Veeva offers customer relationship management (CRM) and content management software to the life sciences industry, competing with companies such as Oracle Corp, Cegedim SA of France and EMC Corp.

The company’s software is used by 33 of the 50 largest drug makers, including Novartis AG, Merck & Co , Eli Lilly and Co and Bayer Healthcare AG, it said in its IPO filing. (r.reuters.com/nun73v)

Listings of other cloud software companies such as Tableau Software Inc, ChannelAdvisor Corp, Textura Corp and Benefitfocus Inc were well received with a majority of them trading above their IPO price.

Veeva raised about $194 million after its IPO was priced at $20 per share, well above the expected price range.

Of the 13 million shares sold in the IPO, Veeva offered 9.7 million shares, while the rest came from stockholders.

Veeva was co-founded by Peter Gassner in 2007, a former executive of Salesforce.com Inc, the biggest provider of cloud-based CRM services.

Instead of building a generic cloud offering, Gassner decided to build what he calls the “Industry Cloud”, focusing on the healthcare industry.

The company’s products include drug sample tracking with electronic signature capture, quality management and healthcare affiliations management.

Veeva’s net income jumped to $18.8 million in 2013 from $4.2 million in 2012. Revenue more than doubled to $129.5 million.

Net proceeds from the offering will be used for working capital and other general corporate purposes, the Pleasanton, California-based company said.

Morgan Stanley & Co LLC and Deutsche Bank Securities Inc were the lead underwriters for the offering.

Veeva shares were up 82 percent at $36.36 in late morning trading.

Filed under TMT Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a comment