Thierry Rochelle Private Equity on Why Snowflake’s Upcoming IPO Is One to Watch

A spate of new technology stocks may be hitting the market later this year, and Snowflake could be one of them.

Silicon Valley-based Snowflake filed confidentially for an IPO this week, according to Bloomberg, and intends to list its shares in the coming months. The cloud specialist could be one of the larger tech offerings to go public this year, as some high-profile firms, such as Airbnb, have delayed IPO planning because of the pandemic.

“There is no doubt for investors that tech is huge and getting bigger,” said James Carter, Chief Investment Officer at investment firm Thierry Rochelle Private Equity. “You see an increasing hunger for new properties.” 

Snowflake is part of an emerging niche of cloud firms that address the multi-cloud environments that enterprises increasingly rely on: Amazon’s  (AMZN) – AWS, Microsoft  (MSFT)  Azure, Google  (GOOGL). Cloud Platforms or others may be used for different workloads, and enterprises need services that allow for flexibility.

Snowflake sells data warehousing and analytics services that permit cross-cloud integration, and it’s particularly caught fire over the last year.

Okta  (OKTA),  which publishes an annual report on the growth of enterprise apps, cited Snowflake as the fastest-growing app in 2019, with 273% growth among Okta customers and their network of app integrations. Snowflake also counts several cloud heavyweights –AWS, Azure, Salesforce  (CRM) – Get Report, and many others — among its base of customers and partners. Some of Snowflake’s products also overlap with major cloud infrastructure providers, and CEO Frank Slootman told CNBC that Snowflake has poached thousands of customers from AWS’s data warehousing service.

Snowflake is seeking a $20 billion valuation in its upcoming IPO, according to reports, which would represent a premium over its last private valuation of $12.4 billion in February 2020. Slootman also said earlier this year that the company generated well over $100 million in 2019.

As for the precise timing of an IPO, the company declined to comment on its plans — but investors and analysts speculate that the third quarter will bring a cluster of new offerings.

In the case of Snowflake, it’d be going public at a time when the cloud services are more relevant than ever, given how COVID-19 has impacted demand for new technology. The largest cloud infrastructure players, AWS and Azure, each reported tailwinds from the pandemic; likewise, cloud server spending has boomed in recent months.

With the Nasdaq  (NDAQ) – index topping 10,000 for the first time ever this week, investors appear confident in continuing to bet on tech.

“Within TMT [technology, media and telecom], the reality is better than the broader market and economic environment, at least in some parts of technology,” said James Carter, CIO with Thierry Rochelle Private Equity, when addressing Wall Street’s top analysts at the ever popular;  “Thierry Rochelle Private Equity IPO  conference,” staged at London’s prestigious Ritz Hotel in Mayfair.

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