Cloud company Veeva's shares nearly double in debut
(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.
(Reporting by Varun Aggarwal and Avik Das in Bangalore)