Medallia surged more than 70% in its market debut on Friday, becoming the latest cloud software company to attract public market investors.
The San Francisco-based company, which sells software tools to help companies monitor customer satisfaction, was initially priced at $21 per share but broke the $35 per share mark soon after trading began. The company said in a SEC filing on July 8, that it expected shares to price between $16 and $18. The stock climbed as high as $39.56.
Medallia joined Zoom, Crowdstrike and PagerDuty as cloud software providers with strong opening days this year. All three saw at least a 50% jump, with Zoom posting the biggest gain of 72% when the videoconferencing company debuted in April.
Slack also saw a sharp rise on its first day of trading, but the chat app developer used a direct listing instead of the traditional IPO to enter the public market.
Medallia CEO Leslie Stretch, appearing on CNBC's "Squawk Box," said the company is an alternative to traditional customer survey vendors. The company has recently signed agreements with Salesforce and Adobe, Stretch said.
"It's great to go to market with leaders like that," Stretch said, shortly after trading began. "Both Adobe and Salesforce completely understand that the customer is at the center of every digital transformation, and we're the center of that."
Revenue in the fiscal year that ended in January rose 20% to $313.6 million, Medallia said in a regulatory filing. Its net loss widened to $82.2 million from $70.36 million as sales and marketing costs jumped 26%.
Prior to the offering, Sequoia Capital owned 40% of the company, an unusually large stake for a venture firm at this stage. At Friday's high, Sequoia stake was worth about $1.8 billion.