Investor hype and revised expectations have told the tale of HubSpot and its debut on the New York Stock Exchange.
The marketing software group made a convincing start to the week with an initial public offering (IPO) on Wednesday that saw five million shares trade at $25 each, way above the guide price of $19-21.
External investors can still purchase stock in the Boston firm after trading commenced on Thursday, but at a rate of $29.96 as of 10:21am EDT. HubSpot is trading under the symbol HUBS and is on course to become one of the latest US tech firms to reach a worth of $1 billion.
Investors flock to the hub
Founded in 2006, HubSpot is renowned for providing software that empowers an approach described as “inbound marketing”. These tools can be used in a variety of practices, such as search engine optimisation and marketing automation, with a concerted focus on building sales growth and boosting engagement with customers on platforms such as social media, blogs and websites.
Previous fundraising attempts from the company have reaped a total of $100 million. Contributions from investors have led to the company increasing its staff count to over 700 employees and opening offices in the UK, Germany and Australia as well as North America.
Despite this, the firm went into Wednesday with relatively low expectations, and an unprecedented rise in demand for shares proves there are still companies learning of HubSpot’s potential.
It is not all gains and financial security for HubSpot, though. The company boasts over 11,000 users spread across 70 countries but went into its IPO on the back of a net loss of $34.3 million.
HubSpot reported revenue of $77.6 million for 2013, part of which was sucked up by the $53 million spent on its own sales and marketing. Minor improvements have been made since last year and in the first six months of 2014 the company announced revenue of $51.3 million following $33 million of spend on promotional activities
Now, though, it seems the company is ready to turn a corner with input from partners other than CTO Dharmesh Shah and CEO and chairman Brian Halligan, who hold stakes of 8.8% and 4.9% respectively.
Other top shareholders include venture capital firms such as General Catalyst Partners (27%) and Matrix Partners (17%).