The Norwalk, Conn.-based company's shares were up 4.5% to $28.22 at last check. They've traded as high as $32.36, up 20%.
In its initial public offering Datto sold 22 million shares at $27 each to raise $594 million. Datto had marketed the shares for $24 to $27 each.
Datto said it would receive net proceeds of $549.5 million after underwriting discounts, commissions and estimated offering expenses. It intends to use the net proceeds to pay borrowings outstanding under its term loan and revolving credit facilities.
The underwriters have an option on 3.3 million more shares.
The company is backed by the Austin tech-focused private-equity firm Vista Equity Partners. Vista acquired Datto in 2017 and merged it with Autodesk.
Datto was founded in 2007 and it acquired Boston-based Backupify, a cloud-to-cloud backup company.
This year Datto said it surpassed 17,000 managed service providers partners and 1,600 employees. Datto also acquired Australian company Gluh, a real-time procurement platform for MSPs.
Revenue was $458.8 million in fiscal 2019 with annual recurring revenue of $474.7 million. The majority of the company's revenue comes from recurring subscriptions.
The company pegs its addressable market at $137 billion for MSP partners. This market is expected to grow at a compounded annual growth rate of 16.4% through 2023, four times the growth rate of the overall small business IT market, according to CFO magazine.
Software companies have accounted for about 11% of the more than $124 billion raised this year on U.S. exchanges, according to data compiled by Bloomberg.
Datto’s listing comes a day before one by McAfee Corp., which is seeking to raise $814 million.
Datto’s offering is being led by Morgan Stanley, Bank of America, Barclays and Credit Suisse.