C3.ai, which sells AI software, closes at more than double IPO price on first day of trading, raises $651 million
Shares of C3.ai Inc. soared on their first day of trading. The artificial-intelligence software company’s stock closed Wednesday at $92.49, more than double the IPO price. The stock started trading at $100.
The company offers tools for developing, deploying and operating artificial intelligence applications as well as a set of pre-built AI software.
C3.ai, built by Silicon Valley enterprise software entrepreneur Tom Siebel, offered 15.5 million shares at $42 a share, above the estimated price of $36 to $38. The company is listed on the New York Stock Exchange under the ticker “AI.” The IPO raised $651 million for the company.
“This was a financing to enable the company to meet growing demand,” said Mr. Siebel, the company’s chairman and chief executive. “We have the funds sufficient to do our job. And our job is now to expand our distribution capacity, dramatically expand our number of customers, and to make sure every one of our customers and every one of our partners is successful.”
C3.ai is just the latest tech company to see shares take off on the initial day of trading. In September, data-warehousing company Snowflake Inc. shares closed at $253.93, more than double their IPO price of $120. And C3.ai wasn’t the only hot IPO on Wednesday. DoorDash Inc.,the market leader in U.S. food delivery, saw its shares jump 86% on the first day of trading.
Consolidated Edison Inc., New York City’s electric utility, is using a C3.ai application to analyze smart-meter data. The system is used to spot deployment and installation issues and monitor how the devices are working. Allisyn Glasser, an IT director at Con Edison, said C3.ai “is a key piece of our enterprise data analytics platform.”
Ms. Glasser said one of the advantages of C3.ai is that additional functionality can easily be added to the application. Con Edison is looking to use C3.ai software as part of a conservation voltage reduction program, which allows Con Edison to operate its system at ideal voltage levels and reduce the power that their customers use.
Other customers, which include Royal Dutch Shell, AstraZeneca plc, and Baker Hughes Co., are tapping C3.ai for anti-money laundering, energy management, predictive maintenance applications, customer-relationship management and other applications.
Like other startups to hit public markets, C3.ai isn’t profitable. The company had a net loss of $69.4 million on revenue of $156.7 million for the fiscal year ended April 30, according to its S-1 filing with the Securities and Exchange Commission. The company reported a net loss of $33.3 million on $91.6 million in revenue in its previous fiscal year, according to the filing.
Mike Gualtieri, vice president and principal analyst at Forrester Research, said AI platforms is a “very hot space.” C3.ai is focused on helping customers operationalize AI. And the company is selling its products to the C-suite, rather than to chief data scientists and analytics officers lower down the chain as some other AI companies do,” Mr. Gualtieri said.
“The game that we’re playing is to see if we can establish a leadership position in this market.” If the company can do that, Mr. Siebel said, C3.ai will be one of the world’s most important software companies.