Datadog seeks $648m in IPO after rejecting Cisco’s $7bn acquisition offer

19 Sep 2019430 Views

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Datadog, which is looking to raise nearly $650m, will begin trading on the Nasdaq Global Select Market.

On Wednesday (18 September), Datadog announced the pricing of its initial public offering (IPO) of 24m shares of its Class A common stock at a price of $27 per share, meaning that the company is looking to raise $648m.

This is an increase on Datadog’s previous target of between $19 to $22 per share.

In a press release, New York-based Datadog said that the shares would begin trading on the Nasdaq Global Select Market on Thursday (19 September), under the symbol ‘DDOG’. The offering is expected to close on 23 September 2019, subject to customary conditions.

‘Worth more as a public company’

The company offers a monitoring service for cloud-scale applications, providing monitoring of servers, databases, tools and services through a SaaS-based data analytics platform.

Many have been anticipating the company’s public offering since 2017, when CB Insights named the company in its Tech IPO Pipeline report.

Bloomberg reports that Datadog was recently approached by Cisco, which is said to have made an offer of more than $7bn to acquire the software company. According to people familiar with the matter, Datadog rebuffed the advance “because it felt it could be worth more as a public company over time”.

Datadog’s list of customers includes Twitter, Comcast, Biogen and Deloitte. The company is a competitor to Amazon’s AWS and Microsoft’s Azure.

Previous investment

In the past, T Rowe Price Associates, Dragoneer Investment Group, Index Ventures, Iconiq Management and Institutional Venture Partners have invested in the company, which looks set to be valued at more than $7bn following its IPO.

Before the IPO, the company had previously raised $147.9m from investors. It held its Series D funding round in 2016 and raised $94.5m. In its recent S-1, the company reported having more than 8,800 customers, with a revenue increase from $100.8m in 2017 to $198.1m in 2018.

In a statement, Datadog said that Morgan Stanley, JP Morgan and Goldman Sachs are the IPO’s lead underwriters.

Kelly Earley is a journalist with Siliconrepublic.com

editorial@siliconrepublic.com