According to the Wall Street Journal, the next wave of tech IPOs is coming and should contains mainly tech firms focusing on the business sector. While it takes longer time to reach break-even, tech firms focusing on the business sector have in general less volatile revenues and profits since their businees models are based on predictable revenues and recurring monthly fees.
2011 was the year of consumer Internet IPOs—from Groupon Inc., LinkedIn Corp. and Zynga Inc. 2012 is starting with Yelp Inc. and Facebook Inc. Now companies that sell technology mainly to businesses are also getting ready to hit the stock market. This new crop of IPO-ready companies are solving problems that businesses are willing to spend money on, such as improved security or better insight into customer behavior.
Splunk Inc., a San Francisco company that helps businesses capture and analyze the data they generate, and Infoblox Inc., a Santa Clara, Calif., maker of network-automation technology, in January both filed to go public in IPOs aiming to raise around $125 million each. Now other enterprise-tech makers are lining up to get out of the gate. According to people familiar with the matter, security-technology maker Palo Alto Networks Inc., online human resources software company Workday Inc. and tech-management software maker ServiceNow Inc. have picked bankers or are in the final stages of choosing and informing bankers for their IPO process. Atlassian Inc., which provides software building blocks to developers, is also aiming to file for an IPO this year, said another person familiar with the matter. Splunk is still unprofitable but its revenue rose 79% to $77.8 million for the nine months ended Oct. 31. Palo Alto Networks, meanwhile, said in August that its run rate exceeded $200 million in bookings and that it had been cash flow positive for five consecutive quarters.
Even though the IPOs may not happen until the summer, the companies are moving quickly towards a public offering to take advantage of the current IPO window that has been kicked wide open by the excitement over Facebook's filing and a rising stock market. "It's better to be ready to go when you're able to go," said one investment banker.
Source: http://online.wsj.com/article/SB10001424052970203986604577255452644418264.html
Louis Rhéaume
Infocom Intelligence
louis@infocomintelligence.com
Twitter: @InfocomAnalysis
A blog on the convergence of info-communications industries: communications, computing, electronics, entertainment, publications and education. Strategic, technological and financial analysis. English and French blog. Cette chronique traite de l’évolution des industries de l’information et des communications et couvre des aspects stratégiques, technologiques et financiers, comme l’économie du savoir et de l’innovation. L’auteur est Associé principal de Infocom Intelligence.
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