Privately held Boise software company Clearwater Analytics got a huge boost when its initial public offering debuted Friday on the New York Stock Exchange.
Clearwater shares opened 32% higher, at $23,75, than the IPO price of $18 per share. It led to a valuation of the company at $5.5 billion.
Earlier, private-equity firm Welsh Carson Anderson & Stowe, the company’s majority owner, expected an IPO price of only $14 to $16 a share.
“The stock is doing well at open,” CEO Sandeep Sahai told the Idaho Statesman by phone from the NYSE, where 100 employees from Boise and other offices joined him for the announcement. “They’ve put together a spectacular list of investors.”
Shares, sold under the ticker symbol CWAN, hit a high of $26.74. On Friday afternoon, they were trading at $25.78.
The company, which makes software that helps companies manage their investment portfolios, sold 30 million shares on Friday and raised $540 million.
Ahead of the offering, Sahai and other executives met with potential investors to build interest.
“We spoke about our home being in Boise and how we’re so very proud of that,” he said. “I think that rubbed off on the investors to see how passionate we are about what we build.”
The Clearwater Building at 777 W. Main St., a nine-story building adorned with the company’s logo, is probably how Clearwater is best known to most Boiseans. It has served as the company’s headquarters since 2016.
Founded in 2004 by Doug Bates and brothers Dave and Michael Boren, Clearwater is now controlled by Welsh, Carson, Anderson & Stowe, a New York buyout firm that took a majority stake in 2016.
The company reported that revenues from its more than 1,000 clients in 29 countries increased 21% between 2019 and 2020, from $168 million to $203 million. Fifty of its blue-chip clients, including insurance companies, asset managers and large corporations, accounted for $1 million or more apiece in annual revenues as of June 30, 2021, according to the filing.
Clearwater has 1,259 employees, with more than half, 652, in Boise. An additional 180 are located in other parts of the United States, and there are more than 400 combined in Noida, India, and Edinburgh, Scotland.
While many private companies go public through an IPO to raise cash, Sahai said that wasn’t the case for Clearwater.
“We wanted to be a company which is going to lead in the western part of the country,” he said. “Then we wanted to lead in America, all over the U.S. But now we want to lead globally.”
When Clearwater looks to add clients in Europe and Asia, it’s more difficult, Sahai said, because the company isn’t as well-known there. It’s the same thing when it tries to attract new employees abroad.
Taking the company public will make that job easier, he said.
“We have lots of clients around the world that need our software,” Sahai said. “We will push ahead and try and capture as much of the market as we can.”
The infusion of cash will allow the company to weigh the acquisition of other companies as it expands, Sahai said, and also will allow for better compensation to company employees.
“Most companies like ours now realize that if employees are delighted and engaged, they will serve your clients really, really well,” Sahai said.
About 200 employees have ownership options in Clearwater, he said, and that now will increase.
“All employees of Clearwater ... they all are going to have shares in the company,” Sahai said.
Despite looking to add business globally and expand, Clearwater isn’t “going anywhere,” the CEO said, and expects to continue having half of its workforce based in the Boise area.
“As we open offices, as we expand in Boise, we may do something in Eagle or something ... a little bit away from downtown,” Sahai said. “That would be mostly for commuters. Not everybody is a fan of commuting.”