Hyper-converged startup and IPO wannabe Nutanix finds itself in hock for $75m to Goldman Sachs after it was forced to take out a loan because its fund-raising IPO was delayed.
An amendment to its S1 SEC filing says that Nutanix has borrowed $75m from Goldman Sachs, its IPO advisor: “ In April 2016, we issued an aggregate principal amount of $75.0m of senior notes due April 15, 2019 to Goldman Sachs Specialty Lending Group, L.P.”
Nutanix took out this loan to fund its cash needs: “As of April 30, 2016, we had cash and cash equivalents of $90.7m and $101.1m of short-term investments. In the next 12 months, we anticipate our capital expenditures to be approximately $35.0m to $45.0m. We believe that our cash and cash equivalents and short-term investments will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next 12 months.”
We understand after talking to people familiar with Nutanix’s situation that it has $117m in cash and short-term investments without factoring in the loan. The $75m Goldman injection takes that to $192m in the bank.
Nutanix is going to spend $35m to $45m on capital expenditure over the next 12 months, which leaves $72m to $82m in reserve. The free cashflow for the past two quarters totaled -$16m and has been improving, we're told. Assuming Nutanix continues at the same burn-rate for the next four quarters, its free cashflow will come out at -$32m, which will leave $40m to $50m in the bank.
Our understanding is that Nutanix will pay Goldman a minimum of $6.5m for the three year loan, with monthly interest payments. If the IPO happens then Nutanix will pay the loan off.
With EMC being bullish about its VxRail hyper-converged prospects then Nutanix needs to keep up its growth.
It has launched its Xpress product line for small and medium businesses, complementing its large enterprise G2000 and mid-size G5000 products. Hopefully that will sell fast enough so that, should stock market conditions improve, Nutanix could IPO in the second half, we think, of this year. ®
Editor's note: This story was updated after publication to include Nutanix's cash-in-the-bank figures.