With its web-based learning and talent management platform, Cornerstone OnDemand has been helping Fortune 100 customers maximize employee productivity since 2001 and targets a significantly underpenetrated software market. Founded in 1999, and internally-funded until 2007, the company expects to build on its impressive track record of organic revenue growth through cross selling, geographic expansion, and penetration of public sector and small business verticals. Cornerstone OnDemand plans to sell 10.5 million shares at a range of $9 to $11 per share. Existing shareholders are selling 3 million shares, representing 29% of the expected IPO proceeds. Goldman Sachs and Barclays Capital are the lead underwriters on the deal, which is on the IPO calendar for the week of March 14.
While Cornerstone remains a small and unprofitable player and will face increasing competition from larger software vendors, its accelerating bookings ramp and new client adds have the company poised to grow faster than its on-demand talent management peers. A sticky, blue-chip client base provides validation for its platform, and its subscription-based model should help cash flows scale ahead of other profitability metrics. The proposed valuation...
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