September 18, 2013

Benefitfocus Debuts As A Public Company

Staff Report

Investing in Charleston's Tech May Prove a Solid Alternative to Traditional Investments

Today is yet another significant milestone in the development of Charleston's tech economy. As Benefitfocus CEO, Shawn Jenkins, hammers the gavel to open another trading day on NASDAQ, his company, founded in June 2000, debuts as a public company under the stock ticker, BNFT. Along the way, there were many local believers in the company who supported them with expertise and early stage capital, then followed by savvy international investors.

Irrespective of where the stock levels off in its initial day of trading, today is a day to celebrate the enlightened leadership at the company, the investors who provided the fuel for the company to grow and the many team members who have toiled away to make the vision reality. Today is validation for Benefitfocus and a reason for our entire community to celebrate the second software company IPO in less than a decade.

According to reports, Benefitfocus, with approximately 800 employees, will offer 4.935 million shares and is expected to start trading at $26.50 per share. On July 22, 2004, Blackbaud (BLKB), also with 800 employees at the time, offered 8.1 million shares and started trading at $8.00 per share. Less than a decade later, Blackbaud is trading at $38.90 near their 52 week high of $38.96 and offers a dividend yield of 1.3%. Blackbaud now employs approximately 2,800 employees around the world.

Charleston's commercial tech community continues to add jobs at an unprecedented rate with the robust growth only limited only by the current shortage of skilled technical talent. While a matter national importance, the talent shortage is also being felt at a local level and must be addressed at all levels of government and education and the companies themselves. On the local front, the Charleston Digital Corridor has stepped up with CODEcamp, an initiative that leverages local tech talent to teach emerging web and mobile technologies for both beginners and industry professionals.

Just as private investors stepped up to help Benefitfocus succeed, our state, region and community must jointly address the skills gap by making strategic investments in education and training. Our educational institutions must embrace a market approach or risk declining enrollments as online training outfits like Coursera and Khan Academy put students on a path to well paid job opportunities in the 21st century economy for fraction of the cost of a college education.

Charleston has emerged as a premium destination for technology companies and the Benefitfocus IPO lends further validity to this claim. Further success is definitely on the way and will not be by accident – rather by strategic public-private investments to help entrepreneurs succeed.

Benefitfocus (BNFT) closed at $53.55 (up 102.08%) on its first day of trading