Xactly becomes San Jose’s 2nd IPO this year

San Jose tech firm Xactly Corp. became the city’s second initial-public offering of the year on Friday when it began trading on the New York Stock Exchange.

Shares of Xactly, which sells cloud software to businesses to improve sales performance, opened at $8, matching the price set Thursday evening. Shares rose slightly in the late morning and early afternoon, trading between $9 and $10.

The San Jose-based company raised $56.3 million in its debut, the fourth tech IPO from Silicon Valley this year, following Fitbit’s blockbuster deal last week that raised $731.5 million.

“We accomplished what we wanted to do, which was to raise the capital to fund the company long into the future,” Xactly CEO Christopher Cabrera said in an interview Friday morning. Despite a sleepy IPO year, Xactly, founded in 2005, decided it was time to go public because “becoming a public company gives us a larger, more public platform to educate companies” about our software.

But Xactly’s debut brought in less money than the company had hoped — or initially planned for. In earlier IPO filings, it gave a per-share price estimate of $10 to $12 before lowering the price on Thursday. At the mid-point of the earlier range, it would have raised $77.4 million.

At opening price Thursday, Xactly was valued at $221.6 million. The company, which has about 350 employes, 200 of who are in San Jose, is trading under the symbol XTLY.  It was the second IPO from a San Jose company, following Apigee’s in April.

The company has seen a 34 increase in subscriptions for its software since last year. Its revenue rose 72 percent from 2012, reaching $47.3 million for the year ending Jan. 31, 2015. But Xactly is highly unprofitable, losing $18.5 million last year, double its losses from 2012.

Cabrera said much of the tech world dismissed his idea for a SaaS (Software-as-a-Solution) company a decade ago when he set out to start Xactly. But he made a bet on a market that others hadn’t yet predicted would become a prominent sector of technology.

“It’s been an amazing 10 years to watch the adoption of SaaS,” he said.

Xactly has raised just about $87 million from venture capitalists, a fraction of what many other SaaS companies are raising these days in this gangbusters funding environment.

“It speaks to us being responsible to our investors,” Cabrera said.

Image: Xactly logo from xactlycorp.com



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