C3.ai sets IPO size above half-a-billion dollars

The cloud software operator that uses AI to do industry-specific data analysis would see an initial value of $3 billion.
Written by Tiernan Ray, Senior Contributing Writer

C3.ai, the artificial intelligence services company founded by software pioneer Tom Siebel that filed to go public two weeks ago, this morning set the price for that IPO in a range of $31 to $34, giving the deal a value of over half a billion dollars. 

C3.ai plans to list under the ticker "AI" on The New York Stock Exchange. The deal is led by investment banks Morgan Stanley, JP Morgan, and Bank of America.

The formalization of details of the offering comes at the onset of the company's roadshow to woo investors, a common practice in advance of the debut of a public stock. 

C3.ai said the deal will consist of 15.5 million shares of its Class A common stock, plus an over-allotment option of 2.325 million shares. That total, 17.825 million, would mean the deal would have a value of $553 million to $606 million. 


Moreover, in the revised prospectus filed this morning with the Securities & Exchange Commission, C3.ai states that the deal would result in a total of 96.9 million to 99.2 million shares issued and outstanding for the company, depending on whether the over-allotment option is exercised. That would give C3.ai a market cap of $3 billion to $3.37 billion based on the hypothesized price range.

C3.ai has described its purpose in life as applying artificial intelligence to sales and marketing. What it is actually doing appears to be much more fixing the sins of infrastructure software such as Hadoop, and its commercial implementations by Cloudera and others.

The company has developed its own platform-as-a-service, or PaaS, a set of building blocks for putting together a system to analyze data coming from a variety of signals, including traditional databases, but also Internet signals such as social media, and, perhaps most important, sensors, including the kinds of sensors industrial companies might build into equipment in the field that they want to monitor. 

Siebel, who was recruited to database giant Oracle in 1983, later founded his eponymous enterprise customer relationship management software firm in 1993. He sold that company to Oracle in 2006 for $5.85 billion, and went on to found C3 in 2009. 

C3 came out of philanthropic work Siebel was doing in 2007 and 2008, after selling to Oracle. He was concerned with making an impact on the planet's energy and climate issues. He soon realized that being a for-profit company might ultimately have a greater impact, he said.

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