Pluralsight IPO is massive success, touted as Silicon Slopes 'milestone'

Utah’s tech community and private investors are celebrating the stock market debut of one of its own. By all accounts, Pluralsight’s initial public offering was an unqualified success. Shares of the Farmington-based online learning company began trading on the Nasdaq exchange on May 17 at an opening price of $20, one-third above the $15 price the company set for its IPO. The stock closed that day at the same price at which it opened and has traded just above $20 since.

The successful arrival of Pluralsight on public markets suggests that investors are still eager to invest in smaller technology companies, according to market watchers like Jordan Novey of CNBC.

Pluralsight first filed to go public on April 16. On May 7, the company said it estimated it would price shares between $10 and $12 each but upped its guess to $12-$14 on May 15. On the day before the debut, Pluralsight announced the $15 pricing. At the $20 share price, Pluralsight raised $310.5 million and now carries a market capitalization of more than $2.5 billion, far exceeding its last private valuation of about $1 billion.

While anyone can pay to take Pluralsight’s courses online, the company focuses on education for employees at companies worldwide. In its filing to go public, Pluralsight said its competitors include Alphabet’s YouTube, Cornerstone OnDemand and Microsoft’s LinkedIn Learning. Pluralsight offers more than 6,700 courses and said it had 14,830 business customers at the end of the first quarter of 2018 with more than 695,000 end users. The company said that 82 percent of its billings come from business customers.

“Technology is moving faster today than these companies can learn it, so that creates a big skills gap around the world,” said Pluralsight CEO Aaron Skonnard. “We make it possible for them to learn these skills quickly, keep up with that pace of change and thrive in the digital age.”

The company maintains an “army of expert authors” around the world to keep courses up to date and relevant, Skonnard said. “That’s what makes our value proposition unique. No one else can move as quickly as us to provide that skilled training into the enterprise.”

Pluralsight was founded in 2004 and has over 900 employees.

Following the opening day of trading, Skonnard told Forbes magazine, “It was awesome, just a really incredible day full of emotion. Just seeing so many parts of our vision coming to reality, it’s been really fun.”

The fresh capital from the IPO is being used to help pay down debt accrued from acquisitions made between 2013 and 2016, Skonnard said. “We will come out of this on really strong positioning.”

The success of the Pluralsight IPO sent a wave of optimism and excitement through the Utah tech industry community. Silicon Slopes, the trade organization that bills itself as empowering Utah’s startup and tech community, was particularly glowing in its appraisal.

“Today’s successful IPO marks an important milestone for the Pluralsight team, the company’s investors and our very own Aaron Skonnard,” Silicon Slopes said in a banner story on its website. “Like a running LeBron James one-hander to ice a ball game, Skonnard and team just clinched an important win for the Silicon Slopes ecosystem. We are all witnesses to one of the most exciting and consequential periods in our community and state’s history.”

According to the Governor’s Office of Economic Development, Pluralsight’s expansion inside Silicon Slopes will lead to approximately 2,400 jobs, $86.2 million in new state revenue and an estimated $371.7 million in capital investment.

“Pluralsight is a Utah business success story and we are proud to support the expansion of homegrown companies,” said Gov. Gary R. Herbert. “As a major player in Silicon Slopes, Pluralsight will continue to benefit from the state’s strong business environment and talent. We look forward to their future growth.”