Infor lands $1.5 billion investment from Koch Equity as it preps for IPO

Enterprise software firms Infor on Wednesday announced that it secured a massive, $1.5 billion investment from Koch Equity Developments (KED) and Golden Gate Capital as it preps for an initial public offering in 2019 or 2020. Infor's IPO could be among the top 10 largest technology IPOs in US history, and the biggest ever for a New York City-based tech company. 

This pre-IPO investment comes two years after from Koch Industries paid roughly $2.5 billion for a minority stake in the software firm. 

Nonetheless, Infor says there's broad investor and analyst interest in a potential IPO, as investors are looking for scale enterprise software investment in the cloud with high barrier to entry, recurring revenue, and customer retention. 

Infor, which is known for its industry-specific software suites, says it took in over $3 billion in revenue in fiscal year 2018. The company also said that 70 percent of its software license revenue comes from sales of its cloud applications. Infor builds all of its CloudSuite offerings on Amazon Web Services, and touts its platforms for offering reliability, speed and scale. Infor is also banking sales growth on its AI platform Coleman. 

In terms of market share, Infor says over 72 percent of all hospitals in the US run Infor applications, as well as 19 of the top 20 automotive suppliers and 8 of the top 10 fashion brands.

"Companies see the value in shifting their enterprise applications to the cloud but can't make that transition until critical industry features are replicated there," said Infor chief executive Charles Phillips. "Infor built these previously bespoke features as standard cloud services and now has access to valuable data across business functions to build predictive analytics and insightful correlations on our Coleman AI platform."