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Nutanix Files For $200 Million IPO

By - Source: Toms IT Pro
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This year has been a whirlwind year of activity on the IPO and M&A fronts, and Nutanix is putting a cap on the year by filing for its IPO. Nutanix, which is valued at roughly $2 billion, will trade on the Nasdaq under the NTNX ticker.

Nutanix is one of the rare unicorns (a startup valued at more than $1 billion), and analysts have expected it to either IPO or be the subject of an acquisition for well over a year. Nutanix has a stellar valuation, but it is not a profitable company. According to its IPO filing, the company lost $126 million in the last fiscal year (ending July 31) and generated a total of $241 million in revenue

Nutanix is a hyperconverged appliance vendor, which places it in the epicenter of one of the hottest datacenter technologies, and its growth trajectory mirrors that trend. According to its S1 filing, the company grew 8x over the last few years, from $30.5 million in 2013 to $241.4 million in 2015. 

However, the hyperconverged market is beset by competition on all sides, largely because it is disrupting a large swath of the datacenter. As such, Nutanix spent $161,829,000 last year, which is more than half of its revenue, on marketing alone. This represents a typical marketing-heavy startup profile, and the company indicated that it does not plan to become profitable any time in the near future.

Nutanix has challenged VMware in a number of very public disagreements. Nutanix was among several companies that protested a five-year $1.6 billion dollar contract that the U.S. Department of Defense granted to VMware, which ultimately scuttled the deal. The two companies have also traded pointed barbs at each other in dueling blog posts, so the public acrimony is no secret.

In an odd twist, Nutanix is one of Dell's close partners and has a robust OEM relationship with the company. This has led to rampant speculation that the Dell/Nutanix relationship may change after the EMC merger, largely because EMC owns the controlling stake in VMware, which will transfer to Dell after merger completion.

Dell has gone on the record with its intentions to continue to support Nutanix, but things can change quickly in the tech sector. This could prove to be a costly problem for Nutanix in the future, and the sudden IPO may be a sign that the company wishes to make the jump to a publicly traded company before a possible change in the Dell relationship damages its valuation. 

Nutanix plans to sell $200 million worth of stock during the IPO but has not revealed how many shares it will offer. The date of the IPO is also not official, but we should expect news soon as 2015 is ending quickly. Goldman Sachs, Morgan Stanley, JP Morgan and Credit Suisse are underwriting the deal.

Paul Alcorn is a Contributing Editor for Tom's IT Pro, covering Storage. Follow him on Twitter and Google+.