Versata Inc (Nasadaq: VATA), whose software helps businesses tailor e-business applications to their needs, gained 39 7/8 to 63 in debut Friday. The company had priced shares well above their upwardly revised range at $24 each.
The deal, underwritten by Thomas Weisel Partners, had estimated the 3.85 million shares to price between $19 and $21 a share, up from an original range of $12-$14.
Like most companies going public, Versata's losses outpace gains. The company had a net loss of $21.8 million on revenue of $12.6 million for 1999, compared to a net loss of $8.1 million on revenue of $3.9 million in 1998.
The majority of Versata's revenue comes from software licensing; revenue from its E-Business Automation System was 53.5 percent of total revenue in 1999. The balance was derived from related services.
Versata recently signed a deal to co-brand an integrated product with IBM (NYSE: IBM) which it said may increase competitive pressure. Although the company will receive license fees from IBM, the co-branding of its E-Business Automation System with IBM's WebSphere Application Server Advanced Edition will likely result in its competing with IBM in the market for e-business automation products.
Versata also said consolidation in the application server market around major software suppliers such as BEA Systems (Nasdaq: BEAS), IBM, Microsoft (Nasdaq: MSFT), Oracle (Nasdaq: ORCL) and Sun Microsystems (Nasdaq: SUNW) could create new competitive forces.
Versata also competes with vendors of Web integrated development environments such as Bluestone (Nasdaq: BLSW) and SilverStream Software (Nasdaq: SSSW).
The company, which makes software for managing Internet and traditional marketing campaigns, is half-owned by VC firm General Atlantic Partners. Prime Response's founder and chief technology officer, James Carling, owns another 25 percent.
Prime Response's net loss almost equaled net revenue for 1999; the company lost $20.4 million over the 12 month period, on revenue for of $20.5 million. Net loss for 1998 was 14.6 million on revenue of $16.5 million.
The company's biggest customers include British Airways, Dell Computer (NYSE: DEL), and Deutsche Bank; nearly three-quarters of its sales come from outside the US.
From the proceeds of its IPO, about $10.4 million will go to General Atlantic Partners. Another $4.3 million will be diverted from the company's development and general corporate purposes to pay Kite Limited, one of its stockholders.
Prime Response competes with vendors of internet-enabled marketing software, including E.piphany (Nasdaq: EPNY), Annuncio, Market First and Rubric; vendors of inbound e-mail management systems, including eGain (Nasdaq: EGAN), Kana (Nasdaq: KANA) and Mustang.com (Nasdaq: MSTG) and vendors of outbound e-mail management systems, including Click Action (Nasdaq: CLAC), Exactis (Nasdaq: XACT) and Match Logic, which was bought by Excite@Home (Nasdaq: ATHM).
Robertson, Stephens & Company is the deal's lead underwriter; Dain Rauscher Wessels and SG Cowen are co-managers.