One year to the day of the troubled Facebook IPO, the climate for tech IPOs in the public markets is significantly less stormy, especially for companies in the enterprise space. Today, not one but two, Tableau Software and Marketo, are debuting on New York stock exchanges. Business intelligence provider Tableau Software, trading as “DATA”, is one of the more highly anticipated tech IPOs of the year, and so far it has not disappointed. It priced its IPO at $31 per share, and it has popped 58% and is at nearly $49/share in early trading on the NYSE.
Meanwhile, Marketo, a cloud-based marketing services company, priced its IPO at $13 per share. It will be trading as MKTO on the NASDAQ exchange,
but has yet to trade at the time of writing. It went up by more than 50% in early activity and then continued to creep up: it’s now 68% above the IPO pricing and trading at $21.48. (We’ll keep updating these numbers for both stocks.)
Taken together, the two are strong endorsements for the market for enterprise services and some of the still-emerging trends within it.
Tableau Software, as its stock ticker unsubtly hints, is aimed more at a big-data play, offering visualization and analytics that it says are easy enough for non-technical people to use. Up to now, it still offers the majority of its services as downloadable, on-premises software rather than as cloud-based apps.
Marketo is positioned as a software-as-a-service, and like a Salesforce for the marketing department, offers its various services — inbound marketing, lead management, social marketing, event management, instant CRM integration, sales dashboards, and marketing ROI reporting and analytics — all in a one-stop-in-the-cloud-shop.
Tableau Software raised some $254.2 million at the $31/share price, after raising that IPO from an initial range of $23-26; this gives it a valuation of $2 billion. Marketo, meanwhile, is raising just under $85 million at a $550 million valuation.
(Incidentally, Facebook’s shares have lost some 30% of their value in the last year, and are at around $26.45/share at the moment.)
How does Tableau’s IPO compare to other high-profile enterprise listings? The money raised is just shy of the $260 million that enterprise security company Palo Alto Networks raised in July 2012. It is still a ways behind HR specialist Workday’s IPO in October 2012, which raised $637 million.
Tableau Software’s multi-billion IPO sets the stage for other multi-billion tech IPOs from the likes of Box and Twitter. Tableau had raised less than $40 million prior to this from NEA and Meritech (Crunchbase puts the total at only $15 million, but Geekwire says that NEA’s total investment in the company has been $29 million).
In contrast, Marketo has raised $108 million in six rounds, from investors that include Institutional Venture Partners, InterWest Partners, Mayfield Fund, Storm Ventures and Battery Ventures.
Today in interesting moves comes the news that serial entrepreneur-turned-investor Russell Buckley – who co-founded AdMob (which sold to Google) is joining the UK government to accelerate its policies around startups, mainly funding. Specifically, he’s joining the UK Government’s Venture Capital Unit. The Unit, launched last year, is designed to help UK companies attract funding from abroad and thus help resolve the funding gap which often exists at early and mid-stages. The Unit is headed by veteran entrepreneur Chris Wade and embraces Clean Tech, Life Sciences and Hardware. Here’s Russell’s blog post on the matter:
My New Job
It’s been about two years since I left Google following the AdMob acquisition and as I forecast here at the time (http://mobhappy.com/blog1/2011/03/30/on-a-personal-note/) I’ve been practicing a portfolio career of being a very active angel investor (Ballpark Ventures has about 25 investments), mentoring at Springboard (soon to be TechStars), doing various Speaking gigs and being a Non-Exec Director of a handful of more mature UK businesses.
To sum up this little role, I wrote:
So, trying to draw this together in one cogent theme, I’m planning to spend the next 10 years helping the UK to become a world class part of the tech scene and one which regularly produces mega-successes like the next Twitter, the next Facebook or the next Amazon. There’s plenty of reasons why The Valley has the advantage over us – early stage funding and a huge natural early adopter market, are my personal bugbears. But if we think big and harness the creativity and talent available, I believe it’s a realisable dream.
I’m delighted to say that I’ve been offered the opportunity to help realise this vision on a more macro-scale, by joining the UK Government’s Venture Capital Unit. The remit of the Unit is to help UK companies attract funding from abroad and thus help resolve the funding gap I was writing about above. My focus will be on tech companies, though the Unit as a whole (headed by veteran entrepreneur Chris Wade) embraces Clean Tech, Life Sciences and Hardware.
To be quite frank, it is the only job that anyone could have offered me that I would have accepted at this stage in my career. It fits perfectly with my personal mission, so when I was approached about the role it didn’t need a lot of thinking about and I find the opportunity to make a real difference to the UK tech scene very exciting.
In the first instance, my focus will be on developing a portfolio of the very best UK tech companies to showcase what a fantastic place the UK already is. And in time, my new colleagues and I will use our best efforts to help find overseas investors, to complement the UK investment community, to help these companies flourish. If you run such a company, or know of anyone who should be on this prestigious list, drop me a line here Russell AT mobhappy DOT com and we’ll get the ball rolling.
BDC Venture Capital, the leading major investment firm for accelerators in Canada, announced today that it would add its financial and expert support to ongoing Canadian Technology Accelerator programs being run in the U.S. by the Canadian government. The programs, spread across various major tech hubs, including Boston, Philadelphia, New York and San Francisco, give Canadian startups the U.S. face time they need to make connections and product sales.
BDC says that the goal is to get the Canadian startups with the most potential into a high-growth market as effectively as possible and says this is a natural extension of its work with Canadian-based accelerators and incubators, including GrowLab, Extreme Startups, Hyperdrive and Founder Fuel. BDC’s Montreal VP Senia Rapisarda explained that, while while some of the most “venture-ready” startups participating in the CTA program will be eligible for its convertible note options for financial support”, this is more about providing an experience for startups that they might not otherwise have.
“We understand that we can bring companies up to a certain level [with our Canada-based accelerators],” she said. “But then, the U.S. clearly being the first port of entry in terms of customers, it really made a lot of sense to pair up with the CTAs in New York, San Francisco, Boston and Philadelphia who were so close to customers that at that point a company could be seriously accelerated.”
Rapisarda uses an example an enterprise software startup that gained access to Fortune 500 companies located in New York and the Bay area through the program, where they were better able to learn exactly what those companies needed and then tailor their offerings for them. Overall, the whole program is about treating companies not as specifically “American” or “Canadian,” but about going after opportunity where it’s biggest, in order to give them the best start possible.
BDC is sending the “best of the crop” to these CTAs, she said, which is “producing results quite quickly.” The approach they’re taking is akin to how you run a startup, Rapisarda says. BDC is treating each case individually and tailoring its approaches to the vertical or industry of each startup they send in terms of how long they’ll stay in the U.S. and what kind of mentors they need and connections they’ll make. She says it’s about being flexible, and “evaluating” and “pivoting” the same way early stage startups do to properly meet the market’s needs. In other words, BDC Venture is very keen on eating its own dogfood when it comes to running these international accelerator efforts.
One key area to watch in the future is how Canada’s Startup Visa program affects the international dynamics of early stage companies, and of accelerators. “What I think is interesting is to see the impact of the Startup Visa on Canadian companies, which are able now to attract even more talent from different countries,” she said. “And how that will impact the relationship with the United States in terms of markets, because clearly the most promising markets are then South America, India and China.”
For now though, the U.S. remains the major gateway for Canadian businesses, and initiatives like this one hope to help them make sure that companies with the strength to succeed in that market get the chance to prove it.
People won’t stop talking about Google Glass, and rightfully so. Ever since the epic parachute-hangout demo, the Valley has been buzzing about the future coming of what is arguably one of the biggest potential advancements in computer interfaces since the iPhone. Lately, the buzz has been bubbling as Google employees, early adopters (Scoble just posted his detailed review), tech bloggers, and contest winners have started to receive their glasses, combined with heavy, consumer-focused advertising, a dedicated fund pairing Google’s own venture arm with two of Sand Hill’s most storied venture capital firms. It’s gotten so much ink that new monikers have emerged, such as “Glasshole,” and the phenomenon was hilariously lambasted in the latest installment of “Jesus Christ, Silicon Valley,” a Tumblr devoted to over-the-top yet oftentimes valid tech-focused satire.
There’s so much to investigate with respect to Glass, so in this week’s “Iterations” column, I’m just going to focus on the early-stage investment side. There’s no shortage of opinions here. My two cents is while Google is investing lots of dollars into a consumer-focused campaign, Glass will not initially be a device that the majority people will want, need, or be able to afford (unlike a cell phone), even when the price comes down. It will also be a very different type of interface. That said, it’s no matter, because the commercial applications for Glass are boundless: Imagine a bunch of kids on a school trip to the Monterey Bay Aquarium, able to press on Glass and learn more about the sea life they see in the tanks. Well, I don’t even know if that’s possible on a watery service, but regardless…instead, I emailed a handful of experienced technology investors I know well to briefly weigh on how they think of Glass as an interface to invest in and around. Below is a collection of the answers I received, edited briefly:
I’m skeptical that GG will get mass adoption. As someone that grew up with glasses, I couldn’t wait until I got LASIK/corrective eye surgery. I just can’t see myself wearing glasses again voluntarily (no disrespect to fashion icon NBA basketball players such as Lebron James wearing hipster glasses). While I don’t think there will be mass adoption, I do see several niche markets springing up. For example, people that really need glasses (elderly, jewelers, surgeons, etc.) should derive tremendous benefit from GG applications. I haven’t seen any GG pitches yet, but I expect to see several this year. As with all investments, I’d put more emphasis on finding the right team than needing to be the first in the space. If GG takes off, there should be ample room for a great team to innovate even if they aren’t first. – Bill Lee
In five years, it’s not about Google Glass per se, which is a brave but still early evolutionary step, but how dependent everyday people will become on certain types of ubiquitous but non-intrusive tech. Specifically, tech that has to be amazingly powerful and sophisticated to achieve that very non-intrusiveness in the first place. A great example – and I think, the more interesting story — is speech recognition, which of necessity is a big part of Glass. Whether it’s in every car via a service arrangement with Apple and Google competing with each other to be the backend, or in lightweight smart earphones that can be left in for one or more days, or in Google Glass-like glasses, always-on listening with deep, smart taxonomies will be a fact of life – i.e., near total adoption by the middle classes of the G7 and beyond.
As an investor, I am looking for companies that presume the success of this kind of technology, then look at how they can apply equally profound compute and algorithmic innovations to transform different industries. For example, what do certain medical practices look like when the EMR/EHR platform is listening in on doctors and nurses, and has something like IBM Watson behind it, watching for missed diagnoses (e.g., sepsis in a hospital), mis-medication, or even malpractice? What does CRM look like when a salesperson’s or customer service rep’s efficacy can be analyzed in real-time from their conversation with a customer? If the video appurtenance to GG’s “speech recognition delivery platform” (my own biased view) turns out to be important, then machine vision becomes the next huge ubiquitous technology (where Google already has an early lead), and we ask questions like “what does the advertising targeting chain look like when every product in a store is lit up under live video scrutiny by the analog of Google Goggles?” I’m indifferent to whether other hardware makers develop their own products, but a) I think they have to, if they want to be part of the “always listening” value chain, whether or not there is a screen attached (the GG incarnation) and b) I want them to, so that a “thousand flowers bloom” and there is innovation and consumer choice that drives rapid adoption. – Matt Ocko
While I was a student at Carnegie Mellon, there was a lot of work on “wearable computing” back then. For instance, check out VuMan from 1997 and Navigator. I cite these to show that the concept of Google Glass as a wearable computer is nothing new. It’s been around for well over a decade. What has changed is that now the technology has become advanced enough to make it a *lot* smaller, *somewhat* less dorky, and by means of being connected, hugely more information-rich.
I believe that Google Glass will be a long-term platform. The initial consumer adoption will be by early adopters — by a lot of us Silicon Valley geek-types who want to play with the tech. However, I suspect that the real adoption will come from more commercial applications — people who need to work with their hands and can benefit from instant access to information. Police cars are equipped with computers to provide cops with access to information on the road. You can imagine a Google Glass app designed specifically for police, fire, EMS etc. Likewise in construction, maintenance, inspection, lots of tasks become orders of magnitude more efficient, when imagined with Glass as the underlying platform.
As you know, I’ve been spending a lot of time on computer vision, cameras, etc. Glass presents the first really usable Augmented Reality platform, because it’s the first time that you can get a true overlay on reality, without having to be walking with your phone/tablet in front of your face! I’ve already had conversation with some companies who are doing advance computer vision and augmented reality work where they could potentially do interesting things with Google Glass. However, since it’s been in such limited distribution so far, it won’t be until they get their hands on it and can evaluate what it’s capable of, before we can really talk more concretely about it. In other words, I’m very curious to see the potential of Glass as a platform for new products/companies, but don’t have enough information to act on it just yet. – Manu Kumar
I am quite optimistic about the long term potential of augmented reality. But I question whether now is the right time for a top down adoption strategy with a polished consumer product. It seems to me that we are at the hacker and early adopter stage instead. By going with an immediate mass market strategy and embracing celebrities I think Google is taking a very big gamble. Let’s keep in mind that the iPhone was far from the first smart phone. A lot of software and application tinkering had happened on Blackberries and other predecessors most of which had niche use cases. I often find myself saying to entrepreneurs that you “can’t push on a string.” It may be a tired cliche but it seems highly relevant for consumer products. If people aren’t ready for it, no amount of hype or spending will make the product stick. The people who are ready now are the hackers and tinkerers. So why not embrace them instead? (reproduced from Albert’s blog, with permission). -Albert Wenger
Seeing a device from your childhood science fiction novels become reality is one of the most exciting moments for any of us who work in tech. However, the commercial success of Google Glass relies on three crucial parts. First, consumers must love the hardware. The product has to be intuitive and function seamlessly with everyday activities. Second, Google must develop a high-quality API that allows developers the freedom to create top-notch software and fully leverage Glass’ capabilities. Third, Google has to ensure that the best applications are discovered by users. All three of these areas are non-trivial and will take more time, and users should be prepared for the day when hype meets reality. Google Glass is an entirely new form factor, and thus there will be a longer uptake time than we have just saw the past two years with tablets. Given that dynamic, we are going to look for simple but effective applications that can can go mainstream as adoption of the Glass product increases with Google’s future iterations of the product. -Hemant Taneja
As an investor, the most exciting possibility about Google Glass is the behavior change it might produce. If Glass or other devices begin to connect and share meaningful information about consumers and their digitized presence, it opens up a massive new arena for applications. Another possibility is that Glass becomes the hub for multiple devices (FitBits, bloodchem sensors, watches, etc.) and becomes an additional app platform connected to but independent of smartphones/tablets. I don’t know if consumers will adopt it, that’s the biggest “if” — not the technology or the devices. There’s plenty of time for investing in a post-Glass reality if adoption happens. I haven’t seen any pitches yet but also haven’t been looking yet, as I’m much more interested in the behavior change it induces and provokes. -Rohit Sharma
Waterloo-based Thalmic Labs is working on getting the MYO armband into the waiting arms of pre-order customers, which now number well above the 25,000 announced in March, Thalmic told me, making up over $4 million in total sales to date. MYO is a unique control device worn around the forearm, which measures muscle movement and electrical impulses and translates those into a control mechanism for various devies over Bluetooth.
This new video by Thalmic is a solid explainer for those curious about the engineering that goes into the MYO, and acts as a sort of general FAQ about how it works and what’s going on in terms of ongoing third-party development from the community MYO is trying to build. MYO’s official dev program is slated to come online in the coming months, and will include early access to hardware.
The new video is more about what’s going on within the company as Thalmic continues to build momentum ahead of its targeted ship date of sometime late in 2013, but the Sphero cameo is cool enough to make me slightly giddy. In case you didn’t know, the Sphero is the best dog toy ever created, and the MYO looks like it’ll make it even better in that regard.
On the business side of things, Thalmic passing the $4 million pre-order mark means that it has added over $300,000 in pre-sales since April 11, so over the course of just two weeks.