Blavatnik-Backed DigitalOcean Raises about US$775m in IPO

(March 24): Cloud computing company DigitalOcean Holdings Inc. raised more than US$775 million in an initial public offering priced at the top of a marketed range, adding to 2021’s run of software listings.

DigitalOcean sold 16.5 million shares Tuesday for US$47 each, according to a statement. The New York-based company had marketed the shares for US$44 to US$47. The pricing implies a market value of about US$5 billion, based on the outstanding shares listed in filings with the U.S. Securities and Exchange Commission.

The company’s largest stockholder, with a 22% stake after the offering, will be an affiliate of Len Blavatnik’s Access Industries Holdings LLC, according to the filings. Other backers include funds connected to venture capital firms Andreessen Horowitz and IA Venture Partners.

Globally, 43 software companies have raised a combined US$14 billion in IPOs since Jan. 1, according to data compiled by Bloomberg. That includes 11 listings raising US$8.65 billion on U.S. exchanges, led by Playtika Holding Corp.’s $2.16 billion IPO and Qualtrics International Inc.’s US$1.78 billion share sale, the data show.

DigitalOcean said it has 570,000 individual and business customers in 185 countries who use its platform to build, deploy and scale software applications.

The company’s revenue has grown over the past three years while losses have held relatively steady, according to its filings. DigitalOcean had a net loss of US$44 million on revenue of US$318 million last year, compared with a loss of US$40 million on revenue of US$255 million in 2019.

The offering is being led by Morgan Stanley, Goldman Sachs Group Inc. and JPMorgan Chase & Co. The shares are expected to begin trading Wednesday on the New York Stock Exchange under the symbol DOCN.

Source: Bloomberg