Credit: Shutterstock photoTech IPOs have slowed down in 2016. So far, there have been less than half a dozen this year, and two in the Bay area. Software maker Talend SA (TLND) is one of them.
Talend CFO and VP of Corporate Development, Thomas Tuchscherer, spoke with Benzinga about the company and how Talend has found IPO favor with investors.
Benzinga: Talend is a leader in the use of open source. How has the use of open source evolved?
Thomas Tuchscherer: Open source is being adopted in all critical software structures. Now, what we see is that no one questions the viability or enterprise performance levels of open source technologies. They are adopting it in mission critical environments and scenarios.
In fact, the market seems to be adopting open source about as well as regular commercial enterprise software.
What has been happening, product-wise, at Talend?
We launched a brand new product offering called Data Preparation. Data Prep enables data analysts, through a very easy to use data interface, to do a lot of the data integration themselves.
It’s analogous to what we saw in the business intelligence world with the i-technology. They were spending 80% of their time preparing data to be analyzed. We launched a product that would facilitate that preparation of data and reduce the time they were spending doing it. We’re very optimistic about its future.
Can you share a little of your background and experience – and what brought you to Talend?
I started my career as an investment banker. I worked initially in Europe and Asia. Later, I moved to the U.S. where I worked in venture capital at a large pension fund.
One of our investments was the acquisition of Cartesis. I went to work for Cartesis until we sold it to Business Objects. I stayed with Business Objects for a while, which was acquired by SAP. At that time SAP had 50,000 employees and I felt I really wanted to go back to where I could really have an impact. That’s hard to do in a company with 50,000 employees.
So, I joined Talend six and a half years ago. It’s been extremely rewarding to see it grow, change and evolve over those years and especially today now that we’ve gone public.
Speaking of which, your IPO launch has been characterized as strong. Initial pricing was above company estimates. Why do you think that is?
I think two factors really play to our advantage in the current market environment.
One is that Talend has this sort of unique combination of being a company with accelerating revenue growth. At the same time, we are cash flow efficient. Normally you see one or the other. Rarely do you see both. I think our efficient growth has resonated very well with investors.
Second, I think we are uniquely positioned in the integration of two big market trends. Being able to leverage big data technologies as well as being able to leverage the adoption of cloud whether it’s Amazon or Google or cloud based applications. It’s fueling a lot of our growth right now.
Talend is only the second Bay area IPO this year. What are others missing that you guys know?
We, as a company, with our European roots have always had a balanced plan approach in terms of how we invested in our growth and in our sales and marketing expenses. Every time we invested in sales and marketing, we always made sure it was an efficient investment. We wouldn’t invest in growth at all costs as some companies so often do.
We felt a bit lonely, to be frank, a couple years ago when we saw a company raise a huge amount of funding and growing at efficient rates but with very inefficient models.
It seems the market now wants and is looking for companies that have that balanced plan approach – strong revenue growth and at the same time have that efficiency at least in terms of cash flow.
We spoke with (Talend CEO) Mike Tuchen last October when Talend was considered pre-IPO. What’s the biggest, most important thing that has happened since then (aside from the IPO)?
First, our two market trends – being able to leverage big data technologies in terms of how we integrate that data, as well as cloud. So, we have two product offerings on those two market trends - big data and cloud. Those have continued to grow at 100% year over year for the last two years.
The other thing I think worth mentioning is that we are continuing to expand internationally. We’ve opened new offices in Australia, in Singapore, in the Netherlands, in Italy and Spain. We’re continuing to expand outside of our core market. We’re laying the seeds for future growth.
What surprises have there been since last year?
One thing that has literally surprised everyone is Brexit. The interesting thing that came out was that the Brexit vote occurred on June 23 and it did not have an impact on our business – either when we closed our Q2 in June or when we talked to our sales teams about their future pipeline.
I think what it made us realize is that companies, regardless of where they are located, need to make investments if they want to stay competitive. The investment they’re making with us is being able to leverage big data technologies in order to better integrate and optimize their data. If American companies are doing it – if French companies are doing it – British companies need to do it as well.
How will Talend use funds raised by the IPO?
Well, since we are cash flow positive to break even, you could argue that we don’t really need the funding from the IPO. Essentially what we’re looking at doing is perhaps continue with technology acquisition.
We would like to accelerate our time to market in specific market segments. I think that’s one of the major areas we’re going to be looking at.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
