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Nutanix Delays IPO

Posted on Wednesday, Aug 31st 2016

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In December last year, hyperconverged storage provider and Billion Dollar Unicorn club member Nutanix filed to go public. The company was expecting to go public earlier this year. But given the weak market conditions, it has still not listed. Many in the technology sector are waiting for it to go public to determine what the IPO markets really look like.

Nutanix’s Financials

In an updated S1 filing, Nutanix saw revenues grow 82% over the year to $305.1 million for the nine month period ended April 2016. For the same period, net losses increased from $88.9 million to $118.6 million. For reference, Nutanix had earlier reported fiscal 2015 revenues at $241.4 million with a net loss of $126.1 million. Losses don’t appear to be going away soon as the company mentioned that it will continue to incur them in the foreseeable future.

By segment, product revenues grew 72% to $241.6 million for the nine month period, and support and services revenues grew 140% to $63.5 million.

Nutanix ended the quarter with nearly 3,100 customers, which include 285 Global 2000 firms. Its customer list boasts of names like Best Buy, Nasdaq, Toyota Motors of North America, and the US Department of Defense Office of the Secretary of Defense.

So far Nutanix has been venture funded with $312.2 million from investors including Anshu Sharma, Battery Ventures, Blumberg Capital, Bob Pasker, EquityZen, Greenspring Associates, InstantScale Ventures, Khosla Ventures, Lightspeed Venture Partners, Morgan Stanley, Riverwood Capital, and Sapphire Ventures. Its last round of funding was held in August 2014 when it raised $140 million at a valuation of over $2 billion. Due to the delay in its IPO, Nutanix raised an additional $75 million in debt financing from Goldman Sachs.

Nutanix’s Acquisitions

Meanwhile, Nutanix has been busy making several acquisitions. Earlier this week, it announced the acquisition of San Jose-based PernixData for an undisclosed sum. PernixData makes software that aggregates all the flash-based storage that comes with servers into one sharable pool, thus offering the organizations the ability to free up speedy storage for use by any server on the network. The acquisition will help Nutanix offer improved performance by leveraging PernixData’s flash caching and optimization technologies. The merged entity will be able to focus on reducing the inertia of application data that inhibits workload mobility across virtual and cloud environments and deliver the flexibility to run any application in any environment, without business-critical data being held hostage to a legacy infrastructure.

It also announced the acquisition of Bengaluru, India-based Calm.io, a development and automation startup. Calm.io offers software that automates software deployment for software that can be run both on company-owned infrastructure or on outside public cloud infrastructure. The terms of the deal were not disclosed. The acquisition will help Nutanix address the demand for hybrid cloud systems where organizations are looking to run sensitive applications within their firewalls and others on public cloud services. Together, the two companies will bring an application-first approach to choosing, managing and consuming IT infrastructure so that customers will be able to pick the right cloud for each application. Nutanix also plans to add cloud automation and management capabilities to its existing software stack to deliver application and service orchestration, runtime lifecycle management, policy-based governance, comprehensive reporting and auditing services to support all application environments, including virtual machines, containers and microservices.

The data storage industry hasn’t seen a very strong IPO performance in the past year. Other similar players like Pure Storage, which went public in October last year, saw its shares peak within a few weeks of listing before trailing to nearly 40% of its value currently. Similarly Nimble Storage has seen its value fall by 55% since its April 2014 high. Nutanix appears to be waiting for better market conditions before listing.

Photo Credit: Jared and Corin/Flickr.com 

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