Pure Storage IPO Possibly on Horizon

Once again this week, there are currently no deals on the schedule set to debut. We continue to reiterate that this period is the traditional slow period or ‘lull’ in the IPO market. We would not at all be surprised to see company’s begin to set terms the week after Labor Day.

One company with strong revenue numbers who is rumored to be nearing updating terms for an IPO is Pure Storage (PSTG). Their mission is to deliver data storage that transforms business through a dramatic increase in performance and reduction in complexity and costs. Their technology replaces storage systems designed for mechanical disk with all-flash systems optimized end-to-end for solid-state memory. At the same time, their innovative business model replaces the traditional forklift upgrade cycle with an evergreen storage model of hardware and software upgrades and maintenance.

The revenue numbers for Pure Storage are impressive. The company generated $174 million of revenues in fiscal year 2015 compared with revenues of $42 million in fiscal 2014—a staggering revenue growth of 313% in a year. Their revenue increased from $24.6 million for the three months ended April 30, 2014 to $74.1 million for the three months ended April 30, 2015, representing period-over-period growth of 201% for our most recent interim period.

Equally as impressive is the company’s projections and market opportunity. R&D and sales and marketing expenses are around three times what they were last year, so Pure is spending the proper amount to make sure they are on the forefront of the industry. The company, with solid products and good marketing, also has a new product line that has been positively reviewed which could help continue the momentum going forward.

Pure has previously raised a $470 million from a variety of strong venture capitalist investors including Greylock Partners, Redpoint Ventures and Sutter Hill Ventures. According to the company, its April 2014 raising of $225 million valued the company at over $3 billion. Furthermore, there are strong lead underwriters on the deal which include: Morgan Stanley, Goldman Sachs, Barclays, Allen & Co., BofA Merrill Lynch.

PureStorage, depending on how the terms are laid out by the underwriters, may be an IPO to watch in September.