DigitalOcean, hyperscale cloud for developers, startups and SMBs, has raised more than $775 million in an IPO (initial public offering) today. The shares are listed at the New York Stock Exchange under the ticker symbol ‘DOCN.’ DigitalOcean has sold 16.5 million shares for $47 each, at the high end of the expected range of $44-$47.
Morgan Stanley, Goldman Sachs & Co. LLC and J.P. Morgan are acting as lead book-running managers for the proposed offering. BofA Securities, Barclays and KeyBanc Capital Markets are acting as joint book-running managers for the offering. Canaccord Genuity, JMP Securities and Stifel are acting as co-managers for the proposed offering.
Digital Ocean’s largest stockholder is an affiliate of Len Blavatnik’s Access Industries Holdings, with a 22% stake after the offering. Other backers include funds which are connected to venture capital firm Andreessen Horowitz as well as venture capital company IA Venture Partners.
The number of publicly traded hyperscale cloud providers is relatively small, so beforehand we didn’t exactly know what to expect from this IPO. The three largest hyperscalers, AWS, Google, and Azure, are listed indirectly, as they are part of larger companies. The same goes for China-headquartered hyperscalers Alibaba and Tencent.
DigitalOcean claims it has 570,000 individual and business customers in 185 countries that are using its cloud platform for building, deploying and scaling their software applications. Until now, DigitalOcean has never made a profit. The company’s revenue has grown over the past few years, but in 2020 it had a net loss of $44M on $318M revenue. In 2019, DigitalOcean had a loss of $40M on $255M revenue.