Cloudian CEO: 'We're marching towards an IPO'

Storage vendor's chief exec reveals obstacles to going public

US-based storage vendor Cloudian has an IPO in its sights, but the path to going public isn't as straightforward as it used to be, according to CEO Michael Tso.

Tso co-founded the file and object storage vendor in 2011, and it has so far raised over $173m (£136m) in investment, including a $94m Series E round last year.

"We've been on a constant path, marching towards an IPO," he told CRN.

"IPOs in the US for tech companies are getting later and later because more late-stage funding is available now and the legal barriers for listing are also getting higher and higher. The combination of these two factors means it's hard to predict the IPO timing."

The CEO added that the proliferation of private capital available to tech companies means that the traditional journey to going public allows companies to take their time.

"These days you see companies go from public to private," he said.

"It used to be that going public was necessary because your early investors had to cash out.

"But now there is enough private capital that even if they have to cash out, there are people waiting to buy their shares so you don't need to go public to solve those problems.

As for Cloudian's timeline, Tso said that he doesn't see it happening in the next two years, and to predict a timeline beyond that is too far in the future. For the moment, he is happy to remain private but takes nothing for granted when it comes to the market.

"I've carefully selected our investors so we aren't tied to a particular time frame," he explained.

"If you look at our investors they are all long-term, patient capital, for example, Intel, Goldman Sachs, who don't have to give money back to private investors because they are investing their own company money. That gives us a lot of freedom.

"Because there is so much late-stage capital available, it really becomes a choice of ‘do you want to get your funding from the public market and be under all that scrutiny and overheads of managing that and be judged quarter to quarter, or do you grow a bit more on private financing?'

"It's a trade-off between market timing and how easy it is to get money off the private market.

"I would say if it's easy enough you always want to stay private because there is much less scrutiny and you are able to do what you do without having to report it every quarter."