Cloud-based database company Couchbase is joining the stream of tech companies going public. The software provider plans to sell 7 million shares on the Nasdaq. Based on their target IPO price of $20 to $23 per share, Couchbase could raise as much as $185 million, giving them a potential valuation of up to $900 million.
What Corporations are Helped by Couchbase?
Among its current roster of over 500 clients, Couchbase helps big names like Cisco Systems, eBay, General Electric, PayPal, and Marriott International manage their mobile applications. More than 30% of the Fortune 100 currently rely on their NoSQL database. At the end of April, the company reported almost $28 million in revenue, an increase of 21% from the previous quarter.
How Much has the Software Provider Already Raised?
As a private company, Couchbase has already raised $251 million including a $105 million Series G round led by GPI Capital who will hold just under 11% of the company at the time of the IPO. Other investors Accel and North Bridge Venture Partners will hold a 17.3% and 11.3% stake, respectively.
Active Second Quarter on the U.S Stock Exchanges Likely to Boost New IPOs in the Third Quarter
The third quarter is looking strong for new IPOs, likely boosted by the momentum from an unexpectedly active second quarter on the U.S. stock exchange. The IPO market hit record highs within the first half of the year, helped by low interest rates and high levels of liquidity. In addition to the high volume of traditional IPOs, the market has seen a major boost from SPACs (special purpose acquisition companies)—shell companies that go public in order to acquire an existing private company.
Why Should Investors Still Keep an Eye on Qualified Small Businesses?
As more companies evaluate the possibility of an IPO, investors need to keep an eye out for the opportunities that show the most potential. In some cases, following investment trends may pay off. In other cases, seeking out tried-and-true benefits may be a better course of action. This can be the case with investing in small businesses through qualified small business stock (QSBS). QSBS offers considerable tax benefits—on a federal level, QSBS is exempt from capital gains tax, and many states offer similar financial incentives for investors to support up-and-coming ventures.
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.