Clearwater Analytics Jumps Into Debut After $540 Million IPO

(Bloomberg) — Clearwater Analytics Holdings Inc., a private equity-backed financial software maker from Idaho, rose 41% in its trading debut after valuing its first public offering above a marketed range to raise $540 million.

Most read by Bloomberg

Clearwaters shares closed in New York trading Friday at $25.37, giving the company a market cap of $5.9 billion. The company sold 30 million shares for $18 each on Thursday after selling them for $14 to $16.

The Boise-based Clearwaters platform provides investment accounting and reporting, performance measurement, compliance monitoring and risk analysis solutions for asset managers, insurance companies and large corporations, according to filings with the U.S. Securities and Exchange Commission.

Chief Executive Officer Sandeep Sahai said the company did not go public for the money.

Brand Challenge

When we went to Europe and Asia, we found that as a small business from Idaho, we had a really hard time branding and getting people to believe in us, Sahai said in an interview. Once you have a public listing, I think it changes that completely. For the same reason, our ability to attract talent was limited. As a private company from Boise, it became increasingly difficult to do that.

The company is looking for mergers and acquisitions to gain a foothold in Europe and Asia, Sahai said.

He attributed the welcome from investors to the Clearwaters platform, as well as to the company that has generated growth and profitability over the past five years.

Clearwater had net income of $8.9 million on revenue of $118 million — on a pro forma basis — for the first six months of the year, according to the filings.

Story continues

Check bets

The company is backed by private equity firms that will continue to control it. Subsidiaries of Welsh Carson, Permira and Warburg Pincus will hold approximately 97% of the shareholders’ voting rights in the company, according to the filings.

Coinciding with the IPO, funds and accounts from Wellington Management, Dragoneer Investment Group and Durable Capital Partners expressed interest in buying $150 million worth of Clearwaters stock, the company said in the filings.

The offering was led by Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley. The company’s shares are traded on the New York Stock Exchange under the symbol CWAN.

(Updates with closing price in second paragraph)

Most read from Bloomberg Businessweek

2021 Bloomberg LP