Confluent Inc., a unicorn startup commercializing the Kafka open-source data platform, divulged on Thursday that it’s headed to the stock exchange.

In a brief announcement, the company said that it has confidentially filed paperwork for an initial public offering with the U.S. Securities and Exchange Commission. The number of shares to be sold and the asking price have not yet been determined. That means Confluent’s target IPO valuation is not set yet either, though it’s likely to be considerable: The startup was valued at $4.5 billion after its latest private funding.

Mountain View, California-based Confluent is a major player in the data management market. It sells commercial versions of Apache Kafka, a popular open-source platform for transporting information between technology systems.

Kafka is deployed at more than 80% of the Fortune 100. Information technology teams use it to stream diagnostics information from data center infrastructure to their monitoring applications. Marketing departments can harness Kafka to transport website activity metrics to their analytics systems. The platform owes its popularity not only to the fact that it supports many use cases, but also its speed: Kafka can transport trillions of data points per day with latencies of just a few milliseconds.

But though powerful, Kafka has certain technical shortcomings. Perhaps the most significant for enterprises is that it’s notoriously complicated to manage. Confluent’s commercial versions of the platform simplify the task. 

One of the management challenges the startup helps address, which is also one of the most complex aspects of running Kafka in production, is that the platform can’t be deployed on its own. It has to be installed together with another open-source tool called Apache ZooKeeper. Confluent’s commercial version of Kafka eases the process of setting up and maintaining ZooKeeper installations. Last month, the company previewed an upcoming software release that will remove the need to install the tool altogether.

Confluent also offers its paid Kafka distribution in a managed cloud edition that spares IT teams from a number of other administrative tasks related to managing infrastructure. The cloud edition could emerge as an important element of the startup’s IPO pitch. Cloud products are a source of steady recurring revenue that can help boost interest from institutional investors.

Confluent disclosed last February that annual recurring revenues had nearly doubled in 2019. Sales of Confluent Cloud, the startup’s managed cloud edition of Kafka, surged by more than 450%. It didn’t disclose absolute numbers.

In its currently confidential IPO filing, the startup may additionally seek to highlight that it helps companies not only transport their data but also analyze it. Confluent’s Kafka distribution includes a tool called ksqlDB that allows applications to run real-time queries on streaming data. Confluent’s presence in the real-time analytics segment expands its total addressable market and thereby revenue growth opportunities, a potentially noteworthy detail for prospective investors.

Image: Confluent