Veeva Systems is a rare bird: A cloud company that’s making money as it goes public

It’s not the sexiest tech, but Veeva Systems made an incredibly strong public debut on Wall Street this morning.

Veeva provides cloud-based software that is targeted to customers in the Life Sciences industry. It helps pharma companies manage sales and operations, and complies with health industry regulations. The company sold nearly $261 million in stock Tuesday at an initial valuation of about $2.4 billion.

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Veeva is now selling a little more than 13 million shares priced at $20 a share, $2 above the price target that it set on Friday. Stock has popped more than 85 percent at the time of going to press, a sign that the shares were still priced too low with money left on the table.

This makes Veeva one of several recent enterprise cloud companies poised for success on the public markets. RocketFuel, RingCentral, and Workday recently filed for an IPO, boosting investors’ confidence in cloud computing technology.

However, what’s particularly impressive about this company is that it reached profitability so early — over three years, Veeva has netted $27 million in profits. The majority of the cloud and software-as-a-service companies (RocketFuel and RingCentral included) boast strong revenues but greater losses, and these have not yet reached the profitability milestone.

Another rare feat: Veeva has only raised $4 million in venture capital since its 2007 founding. Most cloud companies raise far more over multiple rounds, so they can invest in sales and marketing and win larger contracts.

The funding came from one firm, Emergence Capital. Emergence pioneered the specialized, vertical industry approach, as we reported back in August. Veeva is laser targeted on one sector: Life Sciences, rather than building cloud software for a variety of industries.

Emergence had a stake worth $700 million, a 175-fold return on its original investment.

I’ll be interviewing Gordon Ritter, Emergence Capital’s founder, this morning and will update you when I learn more.