Believe it or not, LinkedIn is good for something: starting other businesses.
Last week, software provider Confluent — which started as an internal LinkedIn tool — filed to go public on Nasdaq trading under the ticker CFLT.
Confluent helps enterprises move massive amounts of data between applications, databases, and even to and from the cloud — as the company motto says, they set “data in motion.”
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An IPO with open-source roots
The underlying technology behind Confluent is Apache Kafka — an “open-source distributed event streaming platform.” Yum. According to the Apache Kafka website, the tech is used at 80%+ of Fortune 100 companies.
Here’s where the story gets interesting: Apache Kafka was developed by LinkedIn back in 2011. It was created to help the social media company move around massive amounts of data.
The original developers of the tech — Jay Kreps, Jun Rao, and Neha Narkhede — founded Confluent in 2014 with $500k from LinkedIn.
Since that time Confluent has been on fire…
… because nothing burns hotter than cash
The company is squarely in the “spend money to make money” phase, as Confluent’s recent S-1 shows.
While revenue almost doubled from 2019 to 2020 (from ~$150m to ~$237m), net losses ballooned. Still, Confluent touts 2.5k+ paying customers, 560 of which are dropping $100k+/year.
The company has not released its expected stock price, but was last valued at $4.5B. However, there’s some doubt about whether another sexy SaaS can float in today’s frothy public market.