IPO rocket Veeva: From $7M investment to $4.4B company
- Cromwell Schubarth
- Senior Technology Reporter- Silicon Valley Business Journal
- Email | Twitter | Google+
The Pleasanton software company rode two hot sectors — life sciences and the cloud — and it grew to a valuation of more than $4.4 billion by bucking a couple of popular startup strategies.
Veeva raised a total of only $7 million in outside capital — a pittance compared to the many tens of millions amassed by other software startups — and it actually kept $4 million of that in the bank.
It also remained profitable in the three-year run-up to going public, contrary to the popular notion that startups need to sacrifice profit for growth to be successful.
"We like to innovate in a lot of
ways, including how we grew the company," CEO Peter Gassner told me in a
call from the New York Stock Exchange, where his company's $20 IPO shares were
trading as high as $39.64.
The secret to Veeva's success was targeting a single industry and delivering
its product in the cloud, he said.Veeva provides customer relationship management and content management solutions for the life sciences industry, which Gassner says is valued at $1.6 trillion and growing by 6 percent per year.
It has 170 biotech and pharmaceutical customers, including Pfizer, Eli Lilly and Genentech. Revenue jumped more than fourfold in the past three years to $129.5 million in the fiscal year that ended in January, when it posted a a profit of nearly $19 million.
"We never sold our software to people who didn't need it," Gassner said. "So we didn't have to waste a lot of time and money trying to figure out who to sell to."
Cromwell Schubarth is the Senior Technology Reporter at the Business Journal. His phone number is 408.299.1823.
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