Marketo’s IPO could not have gone better for investors as the stock closed Friday at $23.10 after pricing shares at $13 on Thursday. Co-founder and CEO Phil Fernandez kicked off Thursday’s NASDAQ trading session with $85 million invested through an initial public offering.
The company’s market capitalization is about $724 million, not including additional optional shares available to purchase for underwriters. Not bad for a company that has never turned a profit .
In the past three years, Marketo has seen its revenue rise from $13.5 million to $29.8 million to $52.8 million, but the company’s net loss has also increased every year, growing from $11.8 million in 2010 to $34.4 million in 2012.
“As long as we keep adding customers and keep having them pay the bills, you can’t do any math that doesn’t ultimately get to profitability,” said Phil Fernandez.
Marketo’s competitors include Eloqua, which was recently acquired by Oracle ORCL, Pardot which was acquired by ExactTarget, HubSpot and Act-On. The San Mateo, Calif. company raised close to $100 million in funding from InterWest Partners (33.3% prior to the IPO), Storm Ventures (17.4%), Mayfield Fund (14.2%), Institutional Venture Partners (12.8%) and Battery Ventures (7.2%).