Snowflake eyes $20bn valuation in IPO

Snowflake, the cloud database start-up, is aiming to be valued as high as $20bn during an initial public offering, in what would be one of this year’s largest tech listings as investors show rejuvenated demand for fast-growing technology groups.

The company, which has hired Goldman Sachs to advise on the IPO, had already received interest from investors looking to buy shares, a person briefed on the matter said. 

Bankers have told Snowflake it could fetch a valuation of between $15bn and $20bn, with the listing coming as soon as this summer, according to two people briefed on the discussions. The company has already submitted a confidential IPO filing with the US Securities and Exchange Commission.

Snowflake and Goldman declined to comment on IPO preparations.

At the valuation under discussion, Snowflake would be one of the largest tech listings of recent years, surpassing groups such as the social media company Pinterest.

Founded in 2015, the company has quickly grown to become one of the most valuable US start-ups focused on information technology, with backing from investors including Redpoint Ventures and Sequoia Capital. Its software allows users to analyse large amounts of data stored across multiple cloud platforms, such as Amazon Web Services and Microsoft Azure.

Investors led by Dragoneer Investment Group and Salesforce most recently valued Snowflake at $12.4bn during a nearly $480m round of funding in February, tripling its previous valuation. 

At the time, Frank Slootman, chief executive, said the company was nearing $1bn in annual revenues after experiencing 174 per cent growth last year, and it was close to generating positive cash flows.

Snowflake was aiming to go public in the summer but could wait until September or October, depending on market conditions, said people briefed on the discussions. The company is currently leaning towards a traditional IPO after considering a direct listing, in which no new shares are sold.

Mr Slootman previously said in an April interview that the company could push plans for an IPO into next year following the spread of coronavirus, with the November US presidential election making it difficult to pull off a listing as autumn progresses.

The company’s latest preparations come on the heels of a run of successful new tech offerings met by buoyant demand from public investors.

Last week the marketing software company ZoomInfo jumped more than 90 per cent in early trading after the company priced its IPO above expectations, raising $935m. Shares in Vroom, an online used car marketplace, more than doubled on Tuesday following the company’s listing, rising almost 118 per cent.

Bloomberg first reported Snowflake had filed for an IPO.

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