Appian IPO – The Forthcoming IPO

On the face of it, the forthcoming Appian IPO might seem to be an attractive prospect for potential investors. The field of Business Process Management is a rapidly growing one and a company like Appian, most famous for providing the low code SaaS system which enables businesses to improve their functionality, should surely be one for which all investors interested in tech IPOs are eagerly awaiting. Why then has there been a cautious response to the announcement that the Virginia USA based company is seeking to raise US$86 million through an initial public offering? Appian’s many customers seem satisfied that their product has enabled them to bring together their customers, their data and their processes and finances, all together on one mobile instrument? Surely this is what any tech IPO should offer, a chance to invest in a company that is strongly based in a market that is growing rapidly. In fact, the cautious response to the announcement of the IPO seems to be based on the simple fact that Appian’s revenue growth is slowing. It is important here to note that the caution about the Appian IPO has itself been expressed cautiously; analysts find themselves unsure of what to recommend and as of May 2017, many were hanging fire, some even going so far as to admit that while they liked the BPM market in general, they did not quite know what to make of Appian or its prospects. It may be a case where it is better to wait for more information to come to light than to make confident sounding judgments based on inadequate evidence.

Part of the uncertainty about the Appian IPO, at least by May 2017 was based on the lack of available information on which more accurate predictions could be formulated. All that was generally known was that Appian had filed its S-1 Registration and that it hoped to raise up to US$86.25 million when the Initial Public Offering took place. Vital factors such as the size of the issue, the estimated share price and the estimated post-IPO valuation of the company were simply not available and it was this uncertainty, combined with the above-mentioned slowdown in top line profits, that fuelled much of the uncertainty that surrounded the Appian IPO and how investors should view it. In the absence of this vital information, it was possible to know that Appian had previously raised US$47.5 million in two separate rounds of funding from venture capitalists Novak Biddle Venture Partners and New Enterprise Associates. It was also possible to note that Appian, founded in 1999, seemed to have enjoyed considerable success with the SaaS system mentioned above. Perhaps the final word in the matter of the Appian IPO, at least in the first half of 2017, was to simply admit that it was too early to say much yet about the prospects for the IPO of this interesting but still somewhat ‘mysterious’ company. Doubtless, future revelations will leave with a clearer picture.

(Simon Topliss, Research)

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