HubSpot Inc. (NYSE:HUBS) is up more than 20% in its first day of trading, from its $25 IPO price to $30.32, giving the cloud vendor a $920 million market cap even though the company’s losses have grown every year since 2009, proving that investors are still bullish and ready to put growth ahead of value.

HubSpot

HubSpot has five years of mounting losses

There was no question that HubSpot Inc. (NYSE:HUBS) would be a hot IPO. The company’s revenue has exploded from $6.6 million in 2009 to $77.6 million last year, mostly because of rising subscriptions. HubSpot has more than 11,000 customers worldwide and no single customer accounts for more than 1% of total revenue, and the combination of a strong brand and social media presence should help it to continue growing.

Value investors will notice that losses have also been mounting at HubSpot Inc. (NYSE:HUBS), from a $9.5 million loss in 2009 to a $34 million loss in 2013, and 1H14 losses are larger than 1H13 losses as well, so the trend isn’t exactly reversing. The cost of revenue is up from $3.8 million in 2009 to $29 million last year, dominated by 18-fold increase in the cost of generating revenue from subscriptions. The growth in operating expenses is just as bad, jumping from $12 million in 2009 to $83 million in 2013.

Raising the IPO price didn’t dampen investor spirits

But those losses haven’t dampened investor enthusiasm for HubSpot Inc. (NYSE:HUBS). The company originally floated the idea of a $19 IPO price, then said it would be between $22 and $24, before finally settling on $25, which still left plenty of room for investors to push the price higher.

One of HubSpot Inc.’s (NYSE:HUBS) competitors, Marketo Inc (NASDAQ:MKTO) saw its share price soar 50% above its $13 IPO price last year and then rise as high as $45 though it is now back down to the $31 with lots of volatility along the way. One thing we’ve learned is that investors can focus on growth over profitability for an incredibly long time (see Amazon.com, Inc. (NASDAQ:AMZN)), so betting against the latest red ink tech IPO may not be a great idea either, but HubSpot bulls will need to get ready for a bumpy ride.