Splunk Said to Weigh IPO Valuing Software Maker at $1 Billion

Splunk Inc., a maker of software that collects and indexes data, is considering an initial public offering that may value the company at about $1 billion, said three people familiar with the matter.

Splunk is interviewing bankers to manage the sale, said the people, who declined to be named because the discussions are private. In July, San Francisco-based Splunk named David Conte as chief financial officer, gaining an executive with experience at a public company. The timing of the offering depends on market conditions, one of the people said.

Should Splunk file for an IPO, it would join the biggest backlog of U.S. offerings since 2000, according to Renaissance Capital LLC. The pace of initial offerings slowed in the third quarter as equity markets swooned amid concern about Europe’s debt crisis and a weakening U.S. economy. The Standard & Poor’s 500 Index has dropped almost 10 percent since July.

Paul Wilke, a spokesman for Splunk, declined to comment.

Founded in 2004 by Erik Swan, Rob Das and Michael Baum, Splunk has won business by helping companies monitor and analyze the electronic data they’re producing every day to improve service, cut operations costs and reduce security risks. Splunk says its software is used by more than 2,900 companies in more than 70 countries. The company recorded revenue last year of $67 million.

Intel, Hess

Splunk has raised $40 million from venture firms August Capital, JK&B Capital, Ignition Partners and Sevin Rosen Funds. The company raised $25 million in 2007 to expand sales and marketing, build its international operations and develop partnerships.

Since then, its number of corporate customers has grown more than sixfold. Splunk said in August that revenue in the period ended the previous month jumped 70 percent from a year earlier. Customers include Intel Corp., the world’s biggest semiconductor maker, Hess Corp., a New York-based oil company, and Korea’s Samsung SDS Co.

Splunk is led by Godfrey Sullivan, who joined the company as chief executive officer in 2008. He was previously CEO of Hyperion Solutions Corp. and helped sell the company for $3.3 billion to Oracle Corp. (ORCL) in 2007. Sullivan replaced co-founder Baum, who left the company and is now a partner at investment firm Rembrandt Venture Partners.

CFO Conte joined Splunk from IronKey Inc. Before that, he held various management positions, including financial chief, at Opsware Inc., formerly LoudCloud.

To contact the reporters on this story: Serena Saitto in New York at ssaitto@bloomberg.net; Ari Levy in San Francisco at alevy5@bloomberg.net.

To contact the editors responsible for this story: Jennifer Sondag at jsondag@bloomberg.net; Tom Giles at tgiles5@bloomberg.net

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