Jive Software's shares soared on its first day as a publicly traded company, closing at $15.05 (£9.71) on Nasdaq - a 25 percent jump from its IPO pricing of $12. It also increased the offering from 11.7 million shares to 13.4 million shares.

The California-based company – which aims to be the “Facebook for business,” providing online collaborative spaces where people can jointly annotate and edit documents, post comments and receive automated alerts about colleagues' actions – filed in August to raise up to $100 million in its IPO.

However, Jive's offering was oversubscribed on Monday, helping the company sell more shares at a higher-than-expected price, raising $160.8 million from its listing. At Tuesday's close, the company had a market value of about $862 million.

“We will continue to invest in our social business software platform and take that platform to different markets,” Jive's chief executive Tony Zingale told Reuters. “So the plan in the next six months is to invest and execute."

Jive currently has around 700 clients, including HP, SAP, T-Mobile and UBS. It is backed by private equity firm Sequoia Capital, which own a 35 percent stake. The company is not profitable – it lost $38 million in the first nine months of 2011 – but its revenue has been growing around 60 percent for the last two years.

Jive competes with a number of social-media startups, as well as established business-software companies such as Salesforce.com and IBM. The company's IPO performance is expected to pave the way for other developers of online business software to go public in the next year or two.

“Jive’s IPO is very positive news for the social enterprise software market, validating the industry’s momentum and technology adoption,” said Tom Kelly, chief executive of Jive competitor Moxie Software. “There is no doubt that social enterprise technology can help today’s business leaders become more effective and drive greater efficiencies in their organisations.”

A recent study from Forrester Research found that enterprise social collaboration software, which offer Facebook and Twitter-like capabilities adapted for workplaces, will grow strongly in the coming years, eclipsing demand for more traditional communications and collaboration products.

Organisations will increase their spending on enterprise social collaboration software at a compound annual growth rate of 61 percent through 2016, a year in which the market for these products will reach $6.4 billion (£4 billion), compared with $600 million last year.