Zscaler soars 106% on first day of trading

It was a big debut for enterprise cloud security company Zscaler, which saw its shares skyrocket 106% on its first day of trading. After pricing at $16, shares opened at $27.50, and closed at $34.

This was also well above the original expected price range for its IPO of $10 to $12. The company ultimately raised $192 million. In other words, there was significantly better-than-expected demand for Zscaler.

But not everyone likes a big pop. This means the company could have technically sold shares for more and raised more money. Yet it's a favorable sign for the coming days on the stock market.

Zscaler works with enterprises and says it counts 200 of the Forbes Global 2000 companies as customers. In an interview with TechCrunch, CEO Jay Chaudhry described the business as "the platform which was built in the cloud for the cloud."

He went on to explain that his business was designed to help companies stay secure with a transient workforce. "We want to work from a hotel, airplane, coffee shop," said Chaudhry. "The data center is no longer the center of the universe."

But Zscaler is not yet profitable. For its fiscal 2015, revenue was $53.7 million, 2016 grew to $80.3 million and 2017 saw $125.7 million. Net losses were $12.8 million, $27.4 million and $35.5 million in 2015, 2016 and 2017, respectively. In the requisite "risk factors" section of the S-1 filing, the company warned, "we have a history of losses and may not be able to achieve or sustain profitability in the future." Chaudhry says it's just the "early innings" and that Zscaler has a "predictable, scalable" business.

Zscaler listed on the Nasdaq, under the ticker, "ZS." Morgan Stanley and Goldman Sachs managed the offering. Wilson Sonsini and Cooley served as counsel.

TechCrunch broke the news that Zscaler filed for IPO last fall.

In just the second venture-backed tech IPO of the year, eyes are on Zscaler, which raised $148 million in capital from Lightspeed Venture Partners, Dell, Google Capital and TPG ahead of its IPO.

This was the fifth company founded by Chaudhry. His other four were acquired. He said that TPG was instrumental and helping the company get to an IPO.

The next venture-backed tech debuts will be Dropbox and Spotify, which are expected to list in the coming weeks.