Shares in Snowflake more than doubled on their first day of trading following the largest ever software IPO on Wednesday. Wall Street’s demand for cloud computing business has been burgeoning over the years and the IPO has served as a vote of confidence to confirm that. Snowflake attracted big name investors such a Warren Buffett’s Berkshire hathaway and Sequoia capital among others. The Initial Public Offering price was set at $120; well above the expected range of $100 to $110. The company sold 28 million shares and raised a staggering $3.4 billion. It is now trading on the NYSE under the symbol “SNOW”
What is snowflake
Snowflake offers cloud-based data storage and analytics services commonly referred to as; Data Warehousing. Essentially, it allows users to store and analyse data using cloud-based hardware and software. Founded in California by three data warehousing experts in 2012, Snowflake quickly became a silicon valley unicorn. This was partly due to the rise of big data and the subsequent surge in demand for data warehousing services. Furthermore, the Coronavirus pandemic forced many businesses to set up web based platforms in efforts to facilitate remote work; this made companies like snowflake become very valuable overnight.
The company and other “unicorn” tech startups such as Airbnb, Doordash and others had been expected to go public this year. Most of these companies paused their IPOs owing to the Coronavirus pandemic. However, in a gamble, snowflake decided to proceed with its Initial Public Offering and it paid off.
Snowflake’s IPO has been the largest in the US since Uber’s $8.1 billion floatation in may last year. Over the years, tech startups have attracted a lot interest from investors. This trend is set to continue as more advances are made in the fields of big data and AI. However, it is still to early to celebrate; Snowflake still has to defend its market position against big industry competitors like Amazon and Google.