"As If Millions Of Unicorns Suddenly Cried Out In Terror": Cloudera IPOes At Less Than Half Its Last Private Valuation Round

From ZeroHedge:

It was a little over a year ago when the market first started noticing that the private startup market had gotten just a little ahead of itself, with various dotcom 2.0 darlings such as Dropbox, Square and others slashing their private valuations by substantial amounts. Well, overnight investors at peak private valuations got another harsh reminder of just how much they may have overpaid when  Cloudera, once one of the most highly valued private tech companies, priced its IPO at less than half the company's valuation from its last private financing round back in 2014.

As the FT notes, the share sale marked a new low for so-called unicorns, or private tech companies once valued at more than $1bn. Companies such as Cloudera have turned to Wall Street as the once red-hot private investment market has cooled, forcing some to take big discounts on their former valuations to raise more money.

Among the biggest losers in the Cloudera IPO, if only on paper, will be Intel, which sank $742m into the big data company in 2014. At the time, that investment set a record $4.1 billion valuation for Cloudera, pushing it into the top 30 ranking of most valuable global "unicorns" according to the WSJ. Fast forward to late on Thursday, when the company announced a price of $15 for shares in its IPO. While above the indicated range of $12-$14, it was less than half the $30.95 it sold its shares for in 2014.

Cloudera will raise $225 million in cash proceeds from its NYSE IPO on Friday, giving it an initial market cap of $1.9 billion.

While there have been various other tech companies that have suffered the "private valuation" hammer, forced to accept much lower valuations to maintain their access to capital in the public market, none has taken as big a cut.

“Nothing has happened quite like Cloudera — yet,” said Kashif Sheikh, an analyst at PrivCo, which tracks the financing of private companies. “People are coming to realise that these companies are not worth those last private rounds.”...MORE