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Utah’s Pluralsight crashes the gates on IPO

Stock opens up 33 percent over pre-opening price and closes at $20.21 a share

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Pluralsight founder and CEO Aaron Skonnard poses for a photo at the company's headquarters in Farmington on Friday, Sept. 29, 2017.

FILE - Pluralsight founder and CEO Aaron Skonnard poses for a photo at Pluralsight in Farmington on Friday, Sept. 29, 2017.

Ravell Call, Deseret News

FARMINGTON — For Aaron Skonnard, co-founder and CEO of the tech learning platform company Pluralsight, Thursday was a day to remember.

"I'm super pleased," a tired but clearly ecstatic Skonnard told the Deseret News shortly after markets closed on the first day his company's stock became available to the public.

"It was a fun and emotional day and an exciting milestone for the company. None of us are thinking about this as an exit, we look at it like a new beginning."

And an auspicious beginning it was. Pluralsight's early pricing moved up steadily ahead of the stock launch, initially estimated at $10-$12 in a company filing with the U.S. Securities and Exchange Commission. Eventually, it reached a $15 a share pre-opening price and the company was poised to earn just over $310 million on the 20.7 million initial shares.

On opening, the stock jumped 33 percent over that price and finished regular trading Thursday at $20.21 a share.

The successful launch was celebrated by Utah's tech leaders, and social media traffic throughout the day reflected widespread enthusiasm for Pluralsight's plunge into the public markets, as well as its positive reflection on the Beehive State's booming innovation sector.

Silicon Slopes Executive Director Clint Betts compared team Pluralsight's stellar day to another notable high performer.

"Like a running LeBron James one-hander to ice a ballgame, Skonnard and team just clinched an important win for the Silicon Slopes ecosystem," Betts said. "We are all witnesses to one of the most exciting and consequential periods in our community and state's history."

Skonnard and his team were in New York City to ring the NASDAQ's opening bell Thursday and the celebration spilled over into the exchange's Times Square neighborhood. Before the event, Skonnard appeared on CNBC and described what makes his company a standout in the online tech education realm.

"Tech is moving faster today than these companies can learn it," Skonnard said. "So that creates a big skills gap around the world and holds them back from reaching their full potential. And through Pluralsight's cloud-based learning platform, we make it possible for them to learn these skills quickly, keep up with the pace of change and thrive in the digital age."

Skonnard said the company will utilize the new cash infusion to retire residual debt from a series of acquisitions executed between 2013 and 2015 and "leave the rest on the balance sheet to foster enterprise."

In its SEC filing, Pluralsight noted the company's potential for growth is sizeable, underscoring data that reflects global corporate spending on training initiatives was nearly $360 billion in 2016. And the portion of that spending that is potentially capturable by Pluralsight, according to the company, is in the neighborhood of $24 billion annually.

Farmington-based Pluralsight was launched by Skonnard and three others in 2004 offering in-person, classroom-based technology classes. After spending four years teaching at locations all over the world and building a reputation for a high-caliber curriculum, Skonnard and his team recognized that internet tools had finally evolved to the point where they could move their classes online. The digital reboot of the company launched in 2008 with a selection of its 10 most popular classes and has since evolved into an operation that offers almost 7,000 cloud-based courses. It has also built a customer base of 14,000 business clients in 150 countries and, so far, capturing 60 percent of the Fortune 500 companies.

Unlike many tech startup financing endeavors that scramble for outside funding before a product is ever developed, Pluralsight has been a company on the opposite track, opting to self-finance, or "bootstrap" its operation for nearly a decade before taking on investors.

Dave Noack, Weber State University professor and director of the Hall Global Entrepreneurship Center and Hall Endowed Chair in entrepreneurship in the Goddard School of Business & Economics, said Pluralsight's decision to only give up a relatively small portion of its ownership through the stock sale is likely a reflection of the same philosophy that drove its long run of self-subsistence.

"It does indicate that, again, this is carefully planned growth instead of growth for the sake of growth," Noack said. "Certainly, they could have listed more shares, but clearly they’re being careful about that."

He also noted Pluralsight's move from a private to a public company places it in a much different arena, and it's one that comes with some onerous responsibilities.

"From now on, they'll be under a lot more scrutiny, and it's constant," Noack said. "Publicly traded companies now pay millions each year to file paperwork and adhere to federal regulations. As a startup it’s just not something you have to worry about."

Skonnard told CNBC that interest in Pluralsight's 6,700 tech courses, authored by some 1,300 topic experts, is fueled by the rapidly changing world of technology.

"The tech space is moving so quickly, the average software developer has to replace about half of what they know about every two years," Skonnard said. "They need to be constantly learning to succeed."

"That’s what makes our value proposition so unique. No one can move as quickly as us to provide that skills training into the enterprise."

That ability to move quickly is something that has also been profitable for Pluralsight's platoon of tech instructors. Long before Thursday's stock offering, the company was already minting millionaires. Thanks to a business model that shares profits with the authors of its tech courses, Pluralsight's top instructor raked in over $2 million last year.

For Skonnard, who was on the way to the airport when he spoke with the Deseret News Thursday, the first day of his company's new beginning was etched in emotions.

"These are the milestones that stick with you," Skonnard said. "So many tears and laughter, moments of joy as we all shared this realization of a vision … of something we created years ago."