- Hortonworks S-1 filing (Mattermark Growth Score: 2366)
- New Relic S-1 filing (Mattermark Growth Score: 1729)
For those following our coverage of tech IPOs know, we’ve been exploring the connection between the ratio of revenue to expenses (and more specifically what % of expenses are covered by revenues) and how it relates to the survival of the company as an independent entity over the long term. Historically, slipping below 50% of expenses covered by revenues has been a dangerous path. While Box was lambasted for high expenses and slower growth they still covered 48% of expenses with revenue, while Hortonworks covers just 28%. Also notable is that Hortonworks was spun out of Yahoo just 3 years ago, while the average tech company takes 7 years to IPO.
See how some recent enterprise software startup ratios of revenues and expenses stack up:
One possibility is that the Hortonworks IPO is a reaction to heavy investment in competitor Cloudera, which has received more than $1 Billion in funding including a $900M investment from Intel Capital back in March.
What do you think? Engage with the community and conversation on Twitter @Mattermark