Zendesk Files for IPO of Up to $150 Million

By Erin McCarthy 

Zendesk Inc. filed for an initial public offering Thursday, with the software company looking to raise up to $150 million.

The San Francisco-based startup is part of a wave of so-called cloud services that have benefited as businesses shift to using more applications on the Web. Its software helps companies manage customer-service issues that come in through email, Twitter, phone calls and chat conversations.

The Wall Street Journal reported in January that the company--which makes online help-desk software for businesses--had hired banks in preparation for an IPO. In a regulatory filing with the Securities and Exchange Commission Thursday, the company said it had hired Goldman Sachs & Co., Morgan Stanley, Credit Suisse Securities LLC, Pacific Crest Securities LLC and Canaccord Genuity Inc. as underwriters on the deal.

Software companies, which include cloud providers, were the best performing among tech IPOs in the U.S. last year, according to research by bankers at Deutsche Bank AG. Last year's IPOs of software firms on average returned 59% more than the Nasdaq Composite Index from their debut to the end of the year, just above Internet company IPOs' average 57% net return.

Founded in Copenhagen in 2007, Zendesk founders moved to San Francisco in 2009 and raised their first outside funding from venture capitalists Charles River Ventures and Benchmark Capital. The company has raised more than $80 million from investors including Goldman Sachs, Redpoint Ventures and Matrix Partners.

Zendesk has more than 40,000 customer accounts, which pay between $1 and $195 a month for each employee using the software, according to its website.

For 2013, the company posted a loss of $22.6 million, compared with a loss of $24.4 million a year earlier. However, last year its revenue increased 88% to $72 million, with 41% of its top line coming from customers outside the U.S., Zendesk said.

Zendesk said it intends to apply to list its stock on the New York Stock Exchange under the symbol "ZEN."

Douglas MacMillan and Telis Demos contributed to this article.

Write to Erin McCarthy at [e-mail]

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