Twilio's Success Is the Exception, Not the Rule, in Today's IPO Market

Twilio's (TWLO) market debut Thursday far surpassed expectations but the IPO market still hasn't come to life.

Twilio priced at $15 per share, ahead of the $12 to $14 range it provided, raising $150 million. The stock opened Thursday at $23.99, or 59.9% above the IPO price. Shares closed $28.79, up 92%.

The cloud cloud communications company is now worth over $2 billion, ahead of previous valuations. A July 29 Series E round reportedly valued it at just over $1 billion, while Renaissance Capital estimated a valuation closer to $950 million.

While venture capital backers Bessemer Venture Partners, Union Square Ventures and Fidelity are probably pleased with the strong exit, more such debuts are unlikely in the near term.

"A lot of people are trying to force that story" that the tech IPO market has recovered, Kaylan Tildsley of Triton Research said in a phone interview. "Twilio is the third tech debut of the year, and the first of the traditional venture-backed Silicon Valley mold."

The others were Dell's cybersecurity spinoff SecureWorks (SCWX) and Acacia Communications (ACIA) , a fiber optics group.

Twilio's IPO succeeded despite the abysmal IPO market, Tildsley asserted, because of its sound underlying business model, rather than a newly reinvigorated IPO market.

"At the end of the day, Twilio is a good company," she said. Triton assigned it a rating of 7.2 out of 10, ahead of the firm's average rating of 6.5 "Solid growth, solid management, Goldman [ Sachs] brought it public" as one of the lead underwriters along with JPMorgan.

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