Confluent Stock Begins Trading At $44, Setting Market Valuation In The $10 Billion Range

The much-anticipated Confluent IPO marks the latest stock market debut of a big data tech startup, following last year’s blockbuster IPO by data cloud company Snowflake.

Shares in “data-in-motion” software developer Confluent began trading on the Nasdaq exchange just after noon EDT Thursday under the ticker symbol “CFLT,” hitting the market at $44 per share.

Confluent stock began trading at 12:23 p.m. EDT and initially surged to $47 per share before falling back to $42.50 per share at 1:45 p.m. EDT.

That’s above the $36 per share target price the big data software startup set Wednesday and significantly above the $29 to $33 per share range set in the company’s amended S-1 document filed last week with the U.S. Securities and Exchange Commission.

[Related: Confluent’s IPO: The Details You Need To Know]

The Confluent IPO put the company’s market cap at around $10 billion, according to a MarketWatch story. That is bigger than the market value of such IT companies as Nutanix ($8.2 billion) and Juniper Networks ($8.9 billion).

The sale of 23,000,000 shares of Class A stock raised $828 million for the Mountain View, Calif.-based company, above the $759 million the company originally expected.

Altogether Confluent has about 252.4 million shares of outstanding stock, including Class B stock owned by company founders and early investors, according to MarketWatch and SEC documents.

Confluent’s IPO was eagerly anticipated following the blockbuster IPO of data cloud company Snowflake last September.

Confluent targets its real-time data/event streaming products, including the Confluent Platform software and Confluent Cloud cloud-native service, toward real-time data processing tasks – what the company calls “data in motion.”

Confluent was co-founded in 2014 by CEO Jay Kreps, former CTO Neha Narkhede and Jun Rao. The three previously worked at LinkedIn where in 2011 they developed event streaming software called Kafka – now an open-source Apache Software project – that is the foundation for Confluent’s commercial software.

“We have pioneered a new category of data infrastructure designed to connect all the applications, systems, and data layers of a company around a real-time central nervous system,” Confluent said in its prospectus, included in the S-1 filing.

“This new data infrastructure software has emerged as one of the most strategic parts of the next-generation technology stack and using this stack to harness data in motion is critical to the success of modern companies as they strive to compete and win in the digital-first world,” the company said in the SEC documents.

Prior to the IPO Benchmark Capital Partners VIII was the biggest Confluent shareholder with more than 35 million shares – 15.3 percent of Pre-IPO common stock. Entities associated with Index Ventures own just shy of 29.8 million shares for 13.0 percent of common stock prior to the IPO. That’s followed by CEO and co-founder Jay Kreps (29.6 million shares or 12.6 percent), co-founder Jun Rao (24.4 million shares or 10.6 percent) and Sequoia Capital (21.4 million share or 9.3 percent).

For the year ended Dec. 21, 2020, Confluent recorded revenue of $236.6 million, up 37 percent from $149.8 million in 2019. Revenue in 2020 included $208.6 million from subscription fees and $27.9 million in service revenue. For 2020 the company’s net loss was $229.8 million compared to a $95.0 net loss in 2019.

As of March 31, 2021, Confluent had a total of 2,540 customers, up from 1,050 on March 31, 2020. Current customers include 136 of the Fortune 500, which contributed approximately 35 percent of the company’s revenue in the quarter ended March 31, 2021.

Confluent has been present on the CRN Big Data 100 list for several years.