Irvine-based Alteryx Inc.’s planned initial public offering could snap a nearly two-year drought in Orange County.
The data analytics software maker aims to raise $75 million in the IPO, according to a registration statement filed with the Securities and Exchange Commission.
The public offering, which has yet to be priced, appears more likely to materialize than several others that have fizzled out in the last few years here, with some would-be candidates going the route of private buyouts and others holding off due to the tepid market for securities that marked much of last year.
The recent heat of the stock market has Alteryx planning its IPO for the “not too distant future,” Chief Executive and co-founder Dean Stoecker told the Business Journal before declining to elaborate on a range of related issues. “I would love to talk with you, but we are in the quiet period.”
Glaukos Corp., a Laguna Hills medical technology company, in June 2015 raised about $188 million in the last local IPO. The total pegged the market value of the company—which had $71.7 million in sales and a $37.2 million loss last year, with about 120 employees in OC and some 230 overall—at nearly $950 million (see chart this page). It has risen 69.7% since its IPO to a market value of about $1.61 billion.
Alteryx has been on a fast-track for the past two years, a period when it’s doubled revenue and employment. It had sales of $85.8 million last year, keeping its losses about steady at more than $21 million. It finished the year with more than 400 employees, including 125 or so in Orange County.
Its customer roster reached 2,300, including blue-chip corporations such as Ford Motor Co., Kaiser Foundation Health Plan Inc., Knight Transportation Inc., Nike Inc., Southwest Airlines Co. and Accenture PLC.
Alteryx was the 19th largest software maker in Orange County last year, with 120 local workers, according to Business Journal research.
It has applied to list on the New York Stock Exchange under the ticker symbol AYX.
The IPO is being underwritten by Goldman, Sachs & Co., J.P. Morgan Securities LLC, Pacific Crest Securities, William Blair & Co., JMP Securities, Raymond James & Associates, and Cowen and Co.
The offering appears bound to produce a lucrative payout for a few on the management team, some directors and its roster of institutional backers.
Stoecker controls a 20.4% stake in the company through some 19.4 million shares. Chief Financial Officer Kevin Ruben has a 1.1% stake.
OC’s largest venture capital firm, Newport Beach-based Toba Capital, controls a 6% stake. The firm, launched in late 2012 by billionaire Vinny Smith after he sold Quest Software for $2.8 billion to Dell Inc., has invested about $3 million in Alteryx, according to the filing.
A $547,000 investment came from Smith’s Teach a Man to Fish Foundation.
“We invested early in the business and helped them turn it around,” Smith said. “We put lots of people we knew into the company, and they and the former management have really built an incredible business that we believe will grow into the future.”
Global sales of business analytics software were roughly $41 billion in 2015 and are forecast to increase to $61 billion by 2020, according to Framingham, Mass.-based market tracker IDC. Alteryx’s niche segments of business intelligence and analytic tools, analytic data integration, and spatial information analysis generated $18 billion in sales in 2015 and were projected to hit $27 billion in 2020.
Smith, who has deep tech connections across the globe, brought in New York-based Insight Ventures as an Alteryx investor. The firm, which Smith founded and exited years ago, is the largest shareholder, with a 27% stake.
Insight and its affiliates have invested more than $49 million in the company. It led an $85 million Series C round in November 2015 with San Francisco-based Iconiq Capital, which controls a 5.6% stake.
The funding round pointed to a valuation of nearly $1 billion at the time.
Insight was one of Quest’s first investors, purchasing $5 million worth of shares. And Quest had acquired a number of companies from Insight over a decade leading up to its own sale to Dell.
Other big Alteryx shareholders include Palo Alto-based Sapphire Ventures, 13%; and Thomson Reuters, 13.1%.
Alteryx has raised $163 million.
The company’s customers pay a subscription fee for its analytics software to integrate data, monetize content, forecast sales, map out retail expansion plans, and compare sales and product placement, among other features.
McDonald’s uses it to map potential store locations. AT&T has implemented the software for deeper insights into dropped calls and text messaging. Path.org is using the product in efforts to eradicate malaria in Zambia, where handwritten records from isolated villages must be transported to larger communities to overcome widespread connectivity failures and lack of infrastructure.
Alteryx was founded in 1997 as SRC LLC and took the name of its core product in 2010, a common move in the software industry.
Stoecker has strived to create a collegial and entrepreneurial culture over the years, evident in the company’s open-concept, 40,000-square-foot headquarters at Park Place that features a 1962 double pass-through Volkswagen Bus in the lobby outfitted with a conference room and gas caskets-turned beer taps and cup holders by Long Beach extreme makeover expert RMD Group.
“The culture is one [thing] I worry about,” Stoecker told the Business Journal in June during a tour. “A lot of fast-growing companies forget about what made them great.”
The Colorado native is a big advocate of OC’s vibrant tech scene and says he’s confident Alteryx will be a local success story.
“I think the tech world here is going to explode. The talent is here,” he said last year. “We’re going to be one of the best outcomes Orange County has ever seen.”
