Veeva Systems Inc., a maker of Web-based software for the medical industry, almost doubled in its stock market debut after twice raising the price of its initial public offering.
Veeva climbed 86 percent to $37.16 at the close in New York after earlier gaining as much as 98 percent. The company raised $260.9 million yesterday in the third-biggest U.S. technology IPO of the year, behind FireEye Inc. and Tableau Software Inc.
Investor demand for emerging business-software companies is surging as businesses shift from traditional server-based technology to products in the cloud. Veeva, based in Pleasanton, California, is going after medical companies looking to switch from Oracle Corp. and EMC Corp. products and sells to 33 of the 50 biggest pharmaceutical companies in the world, including Eli Lilly & Co. and Merck & Co.
“We are moving people from client/server into the cloud,” Chief Executive Officer Peter Gassner said today in an interview. “The legacy systems can’t keep up. They’re years and years behind.”
Veeva sold 13.05 million shares for $20 each yesterday. The company first set the price at $12 to $14 earlier this month and raised it to $16 to $18 before increasing it again.
Sales in the three months ended July 31 jumped 68 percent to $49.6 million, Veeva said in its prospectus. Unlike most newly public software companies, Veeva is profitable, recording net income of $6 million in the period.
With today’s gains, Veeva is valued at about $4.5 billion. The company’s biggest investor, Emergence Capital Partners, owns a 31 percent stake valued at about $1.3 billion.
Gassner co-founded the company after a two-year stint at Salesforce.com Inc. He quickly decided to target the pharmaceutical industry, betting that executives in this heavily regulated sector would pay a premium for software that’s compliant and simplifies documentation.