Sequoia-backed Snowflake tests IPO investor appetite with wider losses

[BENGALURU] Sequoia-backed Snowflake on Monday published financial statements for the first time, revealing a surge in revenue growth and huge losses, as the cloud-based data warehouse firm prepares for a high-profile public listing in the coming weeks.

Snowflake confidentially filed to go public earlier this year, shortly after its last funding in February that valued it at over US$12 billion. Sequoia owned an 8.4 per cent stake in the company prior to the offering.

The debut will mark yet another marquee public listing for a Silicon Valley startup, even as all eyes are on Airbnb, Palantir and DoorDash, all expected to go public before the end of the year.

The Silicon Valley unicorns are looking to ride the stunning recovery in US capital markets from the Covid-19 pandemic that earlier this year forced several companies to postpone their debut.

Shares of recently listed online used car seller Vroom and business intelligence platform ZoomInfo Technologies have surged since May.

Snowflake posted a 173.7 per cent jump in revenue to US$264.7 million for the fiscal year ended January compared with last earlier, but net loss nearly doubled to US$348.54 million from US$178.03 million.

"Even though there are losses, Snowflake's 100 per cent-plus growth rate will attract investor interest," said Kathleen Smith, principal at Renaissance Capital, a provider of institutional research and initial public offering (IPO) ETFs.

She added the IPO market is healthy and Snowflake's peers MongoDB, Okta and Splunk have produced strong returns for investors this year. Snowflake plans to list on the New York Stock Exchange, under the ticker SNOW.

According to data platform PitchBook, Snowflake has raised US$1.4 billion till date from a wide range of investors such as Sequoia Capital, Altimeter Capital, ICONIQ and Redpoint Ventures.

Goldman Sachs, Morgan Stanley, JP Morgan, Allen & Co and Citigroup are among the lead underwriters for the offering.

REUTERS