Model N Soars Over 30 percent on IPO

Michael Teague  |

Model N (MODN), a Northern California software outfit that provides revenue management services for healthcare and technology companies, is having a stellar IPO day.  Starting off with a price of $15.50, the stock has soared 34.65 percent, currently trading at $20.87. The company raised about $104 million, and currently has a market cap of around $445 million.

Zack Rinat, the company’s CEO and founder, sees a role for management software that extends beyond the traditional cost-cutting and process-automation needs for things like human capital management in human resource departments, sales and marketing for customer relationship management, and finance for enterprise resource planning.  “Keep in mind that customers lose tens of billions each year by leaving money on the table because they do not effectively manage pricing, rebates/incentives and contracting,” he said in an interview on Wednesday morning.

The other part of the business consists of replacing the existing systems, a market in which he sees a $5 billion opportunity.

Prior to founding Model N, Rinat was the vice president and GM on NetDynamics, the business arm of SunMicrosystems, and of which he was also the founder.  He broke enters the current market, having perhaps forged a new chunk of it himself, by going straight to the big companies like Johnson & Johnson (JNJ), Amgen (AMGN), and Merck (MRK) in such a way that Model N has actually become their “strategic partners”.

Founded in 1999, the company will be competing against industry giants like Oracle (ORCL) and SAP (SAP) for market share.

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Companies

Symbol Name Price Change % Volume
ORCL Oracle Corporation 57.69 0.15 0.26 5,293,566 Trade
MODN Model N Inc. 20.50 0.47 2.35 482,233 Trade
JNJ Johnson & Johnson 128.40 -1.91 -1.47 7,710,905 Trade
MPX Marine Products Corporation 13.21 -0.29 -2.11 15,269 Trade
AMGN Amgen Inc. 176.34 -2.05 -1.15 1,305,066 Trade
MRK Merck & Company Inc. (new) 81.41 0.02 0.02 3,443,290 Trade
SAP SAP SE ADS 125.24 0.61 0.49 1,200,027 Trade

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