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Wall Street Getting Another Cloud Play With the Marketo IPO

And like other cloud offerings, expect this one to be hot


The IPO market has been fairly light on the tech offering side of things, but expect that to change soon, especially in the cloud business.

Enter this week’s latest filing: Marketo.

The company, which was founded seven years ago, operates a platform that helps to automate marketing functions, essentially tracking channels such as web site visits and mobile connections.

To help provide richer functionality, Marketo also has built a partner program that allows for the creation of third-party apps. There also are integrations with popular systems, such as (NYSE:CRM) and Microsoft’s (NASDAQ:MSFT) Dynamics CRM.

The company’s platform is targeted for organizations of any size, though its customer base seems to skew toward larger companies, including Citrix (NASDAQ:CTXS), General Electric (NYSE:GE), Medtronic (NYSE:MDT) and Universal Music Group.

Growth certainly has been strong for Marketo. From 2010 to 2012, revenues soared from $14 million to $58.4 million, though it hasn’t been able to escape the red on the balance sheet — the company lost $34.4 million last year, up from $22.6 million in the previous year.

Going forward, Marketo should have no problem keeping up the momentum. Companies need tools in this new age of marketing, which means creating ongoing relationships through social media channels like Facebook (NASDAQ:FB), Twitter and Pinterest.

And the Marketo IPO should have little difficulty getting traction with investors considering the success of other cloud operators. Just look at Eloqua, a rival to Marketo that came public last year before selling out to Oracle (NASDAQ:ORCL). The return for IPO investors was a mouth-watering 104%.

Marketo plans to list on the Nasdaq under the symbol of “MKTO.” Lead underwriters include Goldman Sachs (NYSE:GS) and Credit Suisse (NYSE:CS).

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.”Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

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