MuleSoft Surges 46% in Debut

It is the first enterprise technology IPO of 2017 and it jumped out of the gate.

MuleSoft helps businesses such as Spotify and Netflix with APIs, and on Friday debuted with is initial public offering opening the day at $17 and closing at $24.75 for a 46% increase.

Over $221 million was raised by the company in its IPO but much more could have been raised if it had been priced just $3 higher at $20.

Bankers usually have a goal of between 20% and 30% in gain the first day trading. If a business is prices too low then money was left out there on the table.

It is mainly high net worth investors and as well as institutional investors with good relationships with underwriting banks that get access to $17, as is standard with all IPOs.

MuleSoft opened Friday at $24.25 and closed at $24.75 meaning most ordinary investors did not experience gains of any large amount.

The company’s ticker is MULE and is listed on the New York Stock Exchange.

Last year MuleSoft posted revenue of $187.7 million, which was up from 2015 revenue of $110.3 million and 2014 revenue of $57.6 million.

Its net losses were $49.6 million, which were down from 2015 net losses of $65.4 million.

The company raised over $259 million previously through a funding round at a valuation of $1.5 billion. The biggest stake in the company at 17.1% is held by Lightspeed Venture Partners.

Hummer Windblad has a stake of 15.8% while New Enterprise Associates owns 14.3%. Morgenthaler Partners, Bay Partners and Sapphire Ventures also have large stakes.

This was an enterprise IPO, which unlike a consumer IPO sees steady growth as opposed to steep ups and downs, said one analyst.

Enterprise companies are generally more predictable to their specific business models, which helps them as a public company.

The past few years have been disappointing when it comes to tech IPOs. In 2016, few companies had IPO and during 2015 half of the newly public tech businesses were trading lower than their original IPO prices when the year ended.

The recent success of IPOs means the time is now for others to enter. The IPO window is now open and companies that are venture backed such as Okta, Yext, Forescout and Cloudera are part of a long list preparing to go public during the next few months.

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