In July 2010, Swedish business intelligence software vendor QlikTech launched its initial public offering to the NASDAQ stock exchange. Bucking the trend of the few technology companies brave enough to do so since the credit crunch, QlikTech’s stock performed better than the company’s own expectations.
It was not altogether surprising that QlikTech’s IPO was oversubscribed, however. Before launching on the market, the company revealed that its customer base grew from 1,500 in 2005 to 13,000 in 2009.
In August 2010, the company published its first set of financial results as a publicly listed company, posting a 56% year-on-year rise in sales to $51.1 million. This was accompanied by net income of $5.8 million, the first ever profit for the company which was founded in 1994.
The company attributes this growth to the technical characteristics of its product, which it claims translates to a BI tool that is more accessible and flexible than those that the established players sell. By storing data in-memory, rather than on disk, the tool is faster to install and can be operated “in a manner consistent with the fluid, associate nature of human thought”, the company says. “We bet on running the software in-memory very early,” explains
CEO Lars Björk, “and today that’s a competitive advantage.”
These qualities allow the company to sell directly to business users. In a document explaining QlikTech’s proposition to potential investors, the company said that this allows it to operate a “land and expand” route to market. This means selling the tool to a project or division within a customer organisation, and then pitching to neighbouring units.
According to Björk, this initial focus on limited deployments is in fact a selling point to enterprise organisations, many of which have been burned while attempting to roll out BI systems across the entire organisation. “The important thing that the larger corporations appreciate is that we don’t try to make a big deal,” he explains. “We sell them something that we think they will see value in over weeks and months. Then we go back and sell them some more.” Björk says that around 25% of its customers are large businesses.
Having raised $112 million in its IPO, the company now needs to convert that investment into profitable growth. One approach is to expand geographically. QlikTech’s stronghold is Western Europe, but October will see the company launch a concerted attack on the US market, holding four conferences around the country in quick succession. The potentially lucrative Asian market is also in its sights, says Björk.
Another avenue for growth is mobile platforms. It has recently developed mobile applications for devices including Apple’s iPhone and iPad, which Björk claims are already being adopted by firms looking to deliver the power of data analysis to employees on the move.Here, however, technical considerations currently limit the potential, as the speed that can be achieved with in-memory systems is nevertheless constrained by the available wireless connection. “I think you need 4G connectivity first, and then I think you will see this take off,” Björk explains.
Of course, now that it is a publicly listed company, and expected to deliver good news for investors every three months, QlikTech can no longer play the patient waiting game that defined the first 15 years of its existence.
But there are no regrets. “If you’re sure there is a global market, then there’s no better way of being seen [than an IPO],” Björk comments.