As investors are showing confidence in cloud-based service providers, Benefitfocus, a leading provider of cloud-based technologies, raised $130 million in its IPO this fall.
The company offered 4.9 million shares at $26.50. Originally, the number of shares was 4.5 million, and the additional shares were offered by existing shareholders. Benefitfocus is a Charleston, South Carolina-based developer of benefits software solutions for consumers, employers, insurance carriers and brokers. It currently serves more than 20 million consumers on its platform. With a user-friendly interface and consumer-centric design, the Benefitfocus Platform provides one place for consumers to access all their benefits. The company currently works with 348 large employers and supports insurance carriers such as Aetna Life Insurance, Allstate Corp and the Blue Cross Blue Shield network. Goldman Sachs, Deutsche Bank and Jefferies acted as lead managers on the deal. Shares rose as much as 87% in their debut, following the example of niche cloud companies, like Tableau Software, ChannelAdvisor and Textura to have strong debuts this year. Investors have been pouring money into cloud-based software makers, as many of them have strong business models and are profitable with room for growth. According to Gartner, software as a service revenue worldwide is expected to nearly double by 2015 to $22 billion from $12.3 billion in 2011. However, analysts are expecting Benefitfocus to post a profit. Last year its net loss was $14.7 million. The company just posted its third quarter financials. “Benefitfocus delivered strong third quarter results that were highlighted by 66% growth in our employer revenue,” said Shawn Jenkins, President and Chief Executive Officer. “We are seeing strong demand for next-generation, cloud-based benefits management solutions as employers need to more efficiently manage nearly 30% of their total employee compensation. We believe Benefitfocus is uniquely positioned to capitalize on these trends in a multi-billion dollar market opportunity.” President added that the recent IPO has become a significant milestone for the company, serving to further increase its market awareness. Source: Article, Image
