Veeva CEO: We were never going to delay IPOOctober 16, 2013: 9:32 AM ET
Veeva's CEO discusses his company's boffo IPO, and why being unprofitable was never on the table.
FORTUNE -- Veeva Systems, a provider of cloud-based CRM and content management solutions for the life sciences industry, will begin trading shares on the NYSE today, after raising around $261 million in its IPO. The Pleasanton, Calif.-based priced its shares at $20 a piece, compared to an original target range of just $12-$14, and is now valued at more than $2.4 billion. I guess that's what happens when your company not only is growing at more than 100% year-over-year, but also is profitable on less than $10 million in VC funding.
So we spent some time on the phone this morning with Veeva (VEEV) founder and CEO Peter Gassner, to learn more. What follows is an edited transcript of our conversation:
FORTUNE: This is a tricky week to go public, given the debt ceiling situation. Did you consider postponing?
PETER GASSNER: The short answer is no. This is a long process, and we started to plan for the IPO quite some time ago. For the past two weeks we've been on the road explaining this industry cloud message to investors and they've asked questions about our company, not about the markets. The financial community does a great job managing those things.
What, if anything surprised you during the roadshow?
I was surprised by how deep the interest was in the fact that we are a a high-growth cloud company with strong profitability, but that we've gotten here by raising less than $10 million in venture capital. A lot of investors are used to cloud computing companies raising between $100 million and $200 million. So I was surprised, and impressed, by the level of due diligence on those specifics, and how they might apply to the larger trend of industry cloud.
So how did you scale to this point with so little VC funding?
We have been focused on building a high-value product tailored specifically to our industry. We know specifically who we want to sell it to, so we don't spend time or money trying to sell it to someone who doesn't really need it.
This is the next generation of cloud computing, and I've been around long enough to see these shifts before. I was at IBM (IBM) in the early days of the mainframe, and then at PeopleSoft when we were moving from mainframes to client servers and then at Salesforce.com (CRM) when we were moving from client servers to the cloud.
Salesforce.com, of course, is one of many cloud companies that doesn't seem to worry much about profitability. Are you in the black intentionally, or is it a happy coincidence?
The DNA of the company is to run an efficient company focused on customer success, but that does include being financially efficient as well. I'm Swiss-American, and it's never really entered my mind to run an unprofitable business.
You've talked about being industry-specific, which for Veeva means life sciences. Do you see the company eventually branching out to other industries?
For now we're really focused on life sciences, which is a $1.6 trillion industry, and helping it move to the cloud. Over the long term I could see us looking at other industries, but it's not even on our radar right now.
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