MuleSoft CEO talks IPO, immigration and more. - Axios
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MuleSoft CEO talks IPO, immigration and more.

MuleSoft, a San Francisco-based SaaS integration company, last night priced the year's first big enterprise software IPO, raising $221 million. Shares are up sharply in their first day of trading on Friday, giving it a value well north of $3 billion.

Axios spoke by phone with MuleSoft CEO Greg Schott, who touched on IPO timing, acquisitions, immigration policy and his message to company employees about following the stock price:

On why the 11 year-old company is going public now:

"For a growing company like this, investors are most focused on what you're able to do with your free cash flow. We'd managed to take negative cash flow down to negative 4%, on the verge of break-even, while continuing to grow the business at 70% per year, which helped us feel that we were good and ready.... The biggest driver of going public, in general, is that we sell mission-critical software to large-scale organizations and we felt that being a public company would give them more confidence to buy from us."

On its professional services segment having negative margins:

"We run professional services as a way to get our companies successful on our products, but we're not waking up each morning looking at how we maximize margins on services. Instead, we use services as a core driver for the software subscription business."

On possible acquisitions:

Schott says that the company is particularly interested in small "fold-in" purchases of security and analytics companies, since MuleSoft "has visibility into the flow of information in every part of an organization" that it could build on top of. It also is interested in acqui-hires of strong engineering talent.

On immigration policy, given that a large number of MuleSoft employees work outside the U.S.:

"The free flow of talent across borders is important to business, to capitalism and is a big driver of the American tech market. Anything that impedes that flow is not positive. We and others are going to find ways to work through it, but it obviously is not helpful."

Message to employees about the IPO:

"We've been telling the team that our mission is to go build a great company for the long-term. The stock is going to move around from day-to-day and month-to-month, and we've showed them times when even companies like Google and Facebook weren't trading great for six months or so. If we do right by our customers and keep building the company, then the stock will follow. But you can't watch the stock price on a near-term basis and feel it reflects the worth, or lack of worth, of MuleSoft."

Giphy

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Freedom Caucus member resigns over health care collapse

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Ted Poe of Texas has resigned from the conservative Freedom Caucus after the group refused to back the GOP health care plan, which he supported.

"Saying no is easy, leading is hard, but that's what we were elected to do," he said in a statement. Here's what he said yesterday about his Freedom Caucus colleagues:

Why it matters: The collapse of the health care bill showed that if conservatives hold out, and Trump can't win over Democrats, it will be very difficult to pass anything significant. Trump needs more on his party's right flank to break ranks and support his agenda.

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He said the Paris pact represented the "anti-jobs and anti-growth" Obama-era policies.

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Evgeny Feldman for Navalny campaign via AP

Hundreds were arrested at large anti-corruption protests in Moscow and other Russian cities on Sunday, including opposition leader Alexei Navalny.

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Also arrested was Alec Luhn, an American correspondent for the Guardian.

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The feud between emerging White House factions (Jared, Ivanka, Cohn and Dina Powell on one side, Bannon, Priebus and Stephen Miller on the other) has been bubbling over into media reports.

Cohn has Trump's ear, but he's a registered Democrat who doesn't share Bannon's vision of economic nationalism and the "deconstruction of the administrative state", as well as a competitor for power.

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White House aides are so doubtful about uniting warring factions of House Republicans that they now are debating how they could lure 15 or so Democrats to join Republicans on big measures:

  • The White House euphemism, as aides discuss the strategy internally: "a broader coalition."
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  • A White House official: "Typically, tax reform would be something that could be bipartisan. That would really be our hope."
  • The road not taken: Some Trump friends think he has made a huge mistake since the inauguration by antagonizing Dems rather than courting them. Because of his tweets and rants, they're less likely to give him the benefit of the doubt than they were Jan. 20, and any ambitious Dem who tried to work with him would get fiercer blowback from the base.
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Using 2002 as a starting point — the year Merkel's predecessor Gerhard Schröder pledged to increase defense spending — U.S. officials allegedly calculated the extent to which German defense spending had fallen short of the 2% of GDP target that NATO requires, added the amount together, and then charged interest. Trump has also reportedly asked his staff to prepare similar calculations for all other NATO members below the 2% target.

Merkel is said to have "ignored the provocation", but has vowed to raise German defense spending gradually.

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Trump's 360 on Mark Meadows and the Freedom Caucus

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A new piece in the New York Times Magazine illustrates how confident President Trump was that he could get the Freedom Caucus and chairman Mark Meadows onside over health care, before the "30 guys in control of the government" tanked the plan.

Trump on March 7:

Mark Meadows is a great guy and a friend of mine. I don't think he'd ever disappoint me, or the party. I think he's great. No, I would never call him out on Twitter.

Trump this morning:

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A top White House official said Trump is "deeply disappointed in the Freedom Caucus," and specifically with Chairman Mark Meadows (R-N.C.).

The senior Republican operative said the hardline House Freedom Caucus "just proved that you have 30 guys in control of the government."

"They have been given power by the circumstances, and they're wielding it," the operative said. "Their view is: 'We got rid of a Speaker [Boehner], we're taking on another Speaker, and we stared down the president.'"

Good Cop was a flop: White House aides are debating whether they should have be more aggressive with the hardliners, including flying into their districts and threatening them with primaries.

"Something in this dynamic has to change," the operative said. "Nobody has taken them on or held them accountable or even mildly messed with them. One of the things you could do is say, on Twitter and in their districts: Obamacare is still the law of the land because of them."

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"Everything's on the table. We'll give these guys another chance," Priebus said on Fox News Sunday this morning. "If we can come up with a bill that accomplishes the goals of the president and Republicans alone, then we'll take it and we'll move forward with it." But for now, Priebus said, the White House is moving on to tax reform and Trump's budget.

I think it's more or less a warning shot that we're willing to talk to anyone. We always have been.

House Ways and Means Committee chairman Kevin Brady, however, said on Fox News' Sunday Morning Futures that the House is "turning-the-page" and that Obamacare's taxes will stay in place. A repeal-only bill, Brady said, would be a "show vote" because it would require eight Democrats in the Senate, and "that's not going to happen."

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Reine Priebus dismissed reports that he is on the chopping block over the failure of the health care bill on Fox News Sunday:

I'm not in any trouble. I've got a great relationship with the president, we talk all the time. Just before coming on the set he gave me a call…. This is gossip, and it's always going to happen.

His comments come after the New York Times reported that blame for the health care disaster was falling on the chief of staff's shoulders.