Billionaire Tom Siebel has a history of success with his software ventures — Wednesday was no exception.
Siebel, known for selling his software giant Siebel Systems to Oracle for $6 billion in 2006, ushered his latest software venture C3.ai (AI) across the finish line to debut on the New York Stock Exchange, with shares more than doubling in their opening trade.
The enterprise software company raised more than $650 million in its 15.5 million share offering, which priced shares at $42 on Tuesday. Despite food delivery giant DoorDash mostly stealing the limelight with its larger $3.4 billion offering, shares in C3.ai opened for trading at more than double their IPO price to hit $100 a share.
Investors seemed to look past C3.ai’s rapidly slowing growth rate due to the pandemic. The company posted year-over-year revenue growth of nearly 75% through April, but slipped to a rate of just 11% in the following six-month period. Siebel admitted growth might not be able to return to pre-pandemic levels anytime soon in a Yahoo Finance interview.
“We will not be growing at 70%, we’ll be growing at a lower growth rate than that,” he said shortly after his company’s debut. “When you get out into 2022, 2023, 2024 you’re looking at relatively large numbers, so the growth rate will be smaller than that, although I think it will grow at a pretty good clip.”
The company, which lists AstraZeneca and the Air Force as customers, recently announced a partnership with Microsoft and Adobe to take on Salesforce in the customer-relations management software space. C3.ai’s role in the venture is to help better identify ways to either manage those customer relations or target other customers that might be predisposed to taking their business elsewhere. Microsoft also took on $50 million worth of C3.ai shares at the IPO price.
Despite rapidly growing opportunities in artificial intelligence around the world, Siebel told Yahoo Finance the company does not plan to participate in opportunities in China. Siebel has long stressed issues with forced technology transfers in the country, which were at the heart of President Trump’s trade battle, and warned against national security threats as reasons why China is not a growth area worth focusing on.
“It was a strategic decision not to do business in China, that’s a big chunk of the AI world. We also made a decision that we will not allow our technology to be used for any unethical purposes,” he said. “We may give up some revenue growth for doing that, but we’ll also sleep at night and look our kids in the eye and be proud of what we’re doing.”
Zack Guzman is the co-host of the 11AM - 1PM hours on Yahoo Finance Live as well as a senior writer and on-air reporter covering entrepreneurship, cannabis, startups, and breaking news at Yahoo Finance. Follow him on Twitter @zGuz.
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