Shares in a company developing artificial intelligence software to connect Christian organisations across the US wavered on its Wall Street debut following a scaled back initial public offering.
Gloo — which counts former Intel boss Pat Gelsinger as executive chair and video rental store Blockbuster’s former chief operating officer Scott Beck as chief executive — rose as much as 5 per cent after it began trading on Nasdaq on Wednesday morning, having raised $73mn from investors. The shares later gave up some of those gains.
The average share price pop for a US IPO that has raised $25mn or more this year is nearly 25 per cent, according to Renaissance Capital Management.
Founded in 2013, Gloo hopes to pull the Christian faith into the digital age by using “values-aligned” generative AI to distribute content and sell marketing services to ministries and community outreach groups.
“There’s an imperative to shape technology for good. On its own it isn’t good or bad, the question is what it’s used for,” Beck told the Financial Times.
Software developed by OpenAI, Anthropic and Google, and used by Gloo, is “still 15 per cent not accurate as it relates to Bible verses, so we’re building foundational models based on curated data, biblical content, extra-biblical content and sermon content . . . to eliminate hallucinations,” Beck added.
Gloo’s IPO comes at a volatile time for US tech stocks, with the Nasdaq Composite down 4 per cent over the past week due to rising concerns about stretched valuations for some of the Silicon Valley groups at the forefront of the AI investment boom.
Gloo sold 9.1mn shares at $8 per share, below the $10 to $12 range initially marketed to investors, giving the Boulder, Colorado-based group a fully diluted market capitalisation of about $630mn.
New York investment bank Roth Capital Partners acted as lead underwriter on the deal. Retail investors were allocated a chunk of Gloo’s shares through brokerages Fidelity Retail and Robinhood.
Gloo has expanded rapidly over the past decade — acquiring five companies this year alone — but burned through cash to do so.
Total revenue nearly tripled year-on-year to $28.5mn in the six months to the end of July. Net losses rose to $71.1mn from $27.4mn over the same period. Gloo said it held cash and cash equivalents of $22.6mn as of July 31.
“Gloo is building a company based on a noble cause (bringing people closer to religion), but their strategy and emphasis on AI are creating more problems than it is solving and burning a hole in their pocket at the same time,” said Paul Cerro, chief investment officer at hedge fund Cedar Grove Capital Management.
Beck acknowledged that Gloo had made “a lot of up front investments” but said it was “moving towards profitability in an aggressive manner”.
Gelsinger has been on Gloo’s board for a decade and became executive chair in March, three months after stepping down at Intel.
