Elastic, a software developer that helps companies embed search functions in their apps, is gearing up for an IPO, joining a crop of subscription software businesses to hit the public markets this year.
The company said in its prospectus on Wednesday that it plans to debut on the New York Stock Exchange under ticker symbol ESTC.
Elastic generates revenue through subscriptions to a commercialized version of the Elasticsearch open-source software, and customers include Uber, Walgreens, Adobe, Merck and Sprint. In the latest quarter, sales jumped 79 percent to $56.6 million, but the company reported a net loss of $18.6 million because of surging costs for research and development and sales and marketing.
IPOs have picked up in 2018 for business software companies, with Dropbox, Zuora, DocuSign and Domo all debuting for public market investors. Elastic’s IPO would mark another milestone for open-source companies, which have gained traction in recent years. Cloudera, Hortonworks and MuleSoft have all gone public. Salesforce acquired MuleSoft for $6.5 billion earlier this year, and Microsoft bought privately-held GitHub for $7.5 billion.
Customers can use Elastic’s cloud-based version or set up and manage the software themselves. The company’s products have been downloaded more than 350 million times since the beginning of 2013.
Elastic said it has partnerships with Google and Alibaba that have enabled Elasticsearch services on their clouds, as well as relationships with Microsoft and IBM that have brought “templates” to simplify the deployment of Elasticsearch.
In 2015, Amazon’s cloud introduced an Elasticsearch service, but Elastic said in the filing that it doesn’t have a partnership with Amazon, nor does it provide support for Amazon’s tool. Elastic does offer its own cloud service that’s available through Amazon’s cloud.
“Amazon competes with us for potential customers, and while Amazon cannot provide our proprietary software, the pricing of Amazon’s offerings may limit our ability to adjust the price of our products,” Elastic said in the filing.
Elastic, which has almost 1,000 employees, was founded in Amsterdam in 2012 and is based in Mountain View, California. CEO Shay Banon is one of four co-founders. Another co-founder, Steven Schuurman, stepped down as CEO last year but retains his board seat.
For the full year that ended on April 30, Elastic’s revenue increased 81 percent to $159.9 million, and the company recorded a loss of $52.7 million.
Elastic said as a placeholder that it’s looking to raise as much as $100 million in the deal. The lead underwriters are Goldman Sachs, J.P. Morgan, Barclays and RBC Capital Markets.
Investors include Benchmark, Index Ventures, New Enterprise Associates and the Australian government’s Future Fund. The company confidentially filed to go public in June, according to Recode.