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Medallia soars more than 75% in market debut as investors flock to another cloud software IPO

Key Points
  • The San Francisco-based company sells software tools to help companies monitor customer satisfaction.
  • Shares were initially priced at $21 but rose as high as $39.56.
  • Medallia joins Zoom, Crowdstrike and PagerDuty as cloud software companies with strong opening days this year.
VIDEO3:5403:54
Medallia CEO Leslie Stretch on the company's IPO

Medallia surged more than 75% in its market debut on Friday, becoming the latest cloud software company to attract public market investors.

The San Francisco-based company, which sells software tools to help companies monitor customer satisfaction, was initially priced at $21 per share but broke the $35 per share mark soon after trading began. The company said in a SEC filing on July 8 that it expected shares to price between $16 and $18. The stock climbed as high as $39.56 before closing at $37.05, giving it a market valuation of more than $4.5 billion.

Medallia joined Zoom, Crowdstrike and PagerDuty as cloud software providers with strong opening days this year. All three saw at least a 50% jump, with Zoom posting the biggest gain of 72% when the videoconferencing company debuted in April.

Slack also saw a sharp rise on its first day of trading, but the chat app developer used a direct listing instead of the traditional IPO to enter the public market.

Medallia CEO Leslie Stretch, appearing on CNBC's "Squawk Box," said the company is an alternative to traditional customer survey vendors. The company has recently signed agreements with Salesforce and Adobe, Stretch said.

"It's great to go to market with leaders like that," Stretch said, shortly after trading began. "Both Adobe and Salesforce completely understand that the customer is at the center of every digital transformation, and we're the center of that."

Medalia's competitors include SurveyMonkey, which went public last September, and Qualtrics, which SAP bought for $8 billion in November just ahead of the company's IPO.

Revenue in the fiscal year that ended in January rose 20% to $313.6 million, Medallia said in a regulatory filing. Its net loss widened to $82.2 million from $70.36 million as sales and marketing costs jumped 26%.

Prior to the offering, Sequoia Capital owned 40% of the company, an unusually large stake for a venture firm at this stage. At Friday's high, Sequoia stake was worth about $1.8 billion.

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Billionaire Marc Lasry and A-Rod weigh in on the IPO market
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Key Points
  • One of President Trump's top campaign bundlers is now lobbying for Amazon's cloud services business.
  • Amazon Web Services has hired Jeff Miller, who is CEO of Miller Strategies, to lobby on "issues related to cyber security and technology," according to a lobbying registration form.
  • Miller, as CNBC reported, is one of more than 400 bundlers helping the Trump campaign raise funds for its reelection effort.