GigaOM » ipo

Twilio raises a $70M Series D as it weighs going public

Kevin Fitchard — Fri, 07 Jun 2013 22:08:47 +0000

Twilio, an API maker that bridges the telecom and the developer worlds, has closed a $70 million Series D round led by Bessemer Venture Partners and new investor Redpoint Ventures. Draper Fisher Jurvetson also participated.

The company has already racked up some pretty hefty investment rounds, and its most likely next step is an IPO — if it doesn’t get scooped up in acquisition. A Twilio spokesman said that Twilio is weighing all its options, but an IPO seems like the most likely path.

Though it’s a hot company, few people actually get what Twilio does due to the arcane telecom world it travels in. It has basically teased out carrier voice and messaging interfaces all over the world and offered them up to developers as simple APIs.

A few lines of code in an app, and developers can send out text messages and voice calls just like the pros. What’s more, they don’t have to strike individual deals with the hundreds of carriers around the world or integrate separately with each of their communications APIs. It’s a model that global carriers have tried to pursue on their own, but so far they’ve failed miserably.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Twitter’s director of platform Ryan Sarver leaves the nest

Eliza Kern — Fri, 31 May 2013 20:51:06 +0000

Twitter’s director of platform Ryan Sarver is leaving the company after four years, he announced Friday, joining a number of other Twitter executives who have left the company or shifted roles in recent months. As many anticipate that the company is preparing for an eventual IPO, it’s interesting to see how the top management and roles are shaping up.

Sarver announced the news on Friday through (how else) a series of tweets:

After four incredible, indelible years at Twitter the time has come for me to fly the coop. My last day will be June 28. No plans but rest.—
Ryan Sarver (@rsarver) May 31, 2013

I am so grateful to @ev, @biz, @goldman, @jack and @dickc for their mentorship and the opportunity to work alongside them.—
Ryan Sarver (@rsarver) May 31, 2013

Twitter & the Platform have an incredible future. I can’t wait to watch the team thrive while cheering from the sidelines.—
Ryan Sarver (@rsarver) May 31, 2013

Over the past few years, Sarver has worked with the developer community and the ecosystem around Twitter, which has been a contentious place to be recently as Twitter has ramped up its own deals with advertisers and large media companies, and shifted the amount of leeway third-party developers can have in working with Twitter’s data. Although developers been given greater access to Twitter’s users in other ways through technology like Twitter Cards, which allows them to provide more visual content on Twitter’s platform.

Sarver is a well-known face among Twitter’s executives and has worked at the company since 2009. He gave no indication of any next moves. (Perhaps a jump to Jelly, along with so many of his fellow ex-Twitter folk? Who knows.) Before working at Twitter, he was director of consumer products for Skyhook Wireless and founded a startup called BlueTrim.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Tableau closes Day 1 as a $2.9B public company, up 64 percent

Derrick Harris — Fri, 17 May 2013 22:59:24 +0000

Data analytics star Tableau had a successful initial public offering on Friday, closing the day up nearly 64 percent at $50.75 per share. That means the company brought in about $254 million (it sold 5 million shares, while stockholders sold 3.4 million) and has a market cap of $2.9 billion. Shares have remained relatively steady in after-hours trading, trending down only slightly.

“We’re thrilled,” Tableau co-founder and CEO Christian Chabot told me during a call after the market closed. One should hope so.

Chabot and his fellow co-founders stand to make a lot of money if today’s closing price holds up, as does its sole investor NEA. The firm put $15 million into Tableau since it launched in 2003, and has rode that sum to profitability and more than $127 million in annual revenue.

Here’s a quick chart (made using Tableau Public) showing who owns how many share and what they’re potentially worth.

The company didn’t really need more capital to operate, Chabot said, but one of the primary drivers was to raise awareness of the company. It has about 12,000 customers, he said, but there are millions more possible users. As part of attracting them, the company is going to expand globally and is working to improve its reach across mobile devices, the cloud and the Mac operating system.

“I don’t believe in the this whole ‘or’ philosophy with computers,” Chabot said. “It’s ‘and’” — meaning people will use desktops and tablets and smartphones.

More prominence and more users singing its praises might also dispel the notion that Tableau is just about visualization. It has some fairly advanced features under the covers (as a commenter to my earlier post about the company’s influence pointed out), even if they’re hidden by the relatively simple user experience.

“Tableau is not a visualization company, per se, it’s really an analytics company,” Chabot said.

However, if the company really wants to expand its reach to everyone one who wants to gain knowledge from data — something Chabot calls a “timeless human need” — it might actually need to get simpler. More marketing can let potential business users know about new features like forecasting and data-extraction, but it won’t make a dentist is Des Moines better at formatting his data.

After raising $254 million in its IPO, though, Tableau is in a good place to do whatever it has to.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Cleantech first-quarter 2013 analysis and outlook

Mon, 08 Apr 2013 16:55:57 +0000

The first quarter of cleantech was a mix of good and bad news. Avis’ purchase of Zipcar and Silver Spring Networks’ long-awaited IPO finally occurring were further signs of thawing capital markets and movement in the acquisition space. However, in both situations valuations were lower than hoped, a sign of how investors view cleantech.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Marketing automation boom continues with Marketo’s $75 million IPO filing

Barb Darrow — Wed, 03 Apr 2013 13:00:18 +0000

We all know based on M&A activity that marketing automation is big. Now, Marketo has filed for an initial public offering valued at $75 million, according to an SEC filing.

The news broke just hours after data visualization fan favorite Tableau filed for a $150 million IPO of its own. The public offerings are seen as validation that companies that build business-to-business software are hot right now.

In November, San Mateo, Calif.-based Marketo raised $50 million in venture funding from Battery Ventures, bringing total funding to date for the 7-year-old company. And category leader Hubspot raked in $35 million in mezzanine funding to bring its total trove to $100 million.

In December, Oracle dropped $871 million to buy Eloqua; a month later InfusionSoft, which focuses on marketing automation for smaller companies, netted $54 million in new funding.

Marketing automation vendors aim to help customers find and qualify sales leads — gleaning attractive prospects from sources including online ads but also from Facebook, Twitter and other sources. The goal is to prequalify these prospects and convert them into actual sales.

Many companies now use an inefficient hodgepodge of processes and products for this purpose. Given that chief marketing officers are now seen as having huge influence on IT purchases, vendors are chasing that constituency.

Marketo’s ticker symbol will be “MKTO” and shares will trade on NASDAQ. VentureBeat has more on the offering.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Our innovation economy won’t grow until we fix the broken IPO market

Mona DeFrawi, Guest Contributor — Sat, 02 Mar 2013 18:30:50 +0000

It’s been 12 years since the internet bubble burst, and in the ensuing fallout, it has become apparent that the IPO market has been fundamentally damaged. Thanks to a lack of national confidence and lingering fears and confusion about the potential risks of IPOs, far too many good companies – ones that could supply much needed jobs to the U.S. economy – are unnecessarily paying the price. While addressing the fouled IPO market certainly isn’t a cure-all for our ailing economy, there’s no doubt that some of America’s missing growth and lost jobs over the past decade are certainly to be found locked away in this hidden treasure chest.

Breaking the IPO market

We can look back now and see that permanent structural changes that were prompted as a result of the dot-bomb crisis– many initially subtle and gradual – shifted our markets so that we frogs didn’t realize that our cold-water world was slowly coming to a boil. And we got cooked.

In fact, a host of factors have contributed to the process. Electronic trading, decimalization, consolidation of the ‘Four Horsemen’ boutique banks into the bulge bracket banks, and the dominance of hedge funds — all these factors helped transform our investment focused public markets into a high-velocity, high-volume trading world. And that has choked the ability of young companies to get the long-term growth support they need to create more jobs for the rest of us.

New regulations to control the underlying corrupt financial practices that helped create and burst the bubble also hindered the growth of legitimate companies with IPO potential. Sarbanes Oxley and analyst regulations added costs while removing critical support. The result has been that the number of years to IPO has been shifted from an average of under five years, to over 10 today. These structural changes in the financial markets have stunted capital formation and in essence broken the IPO process.

Accepting and promoting our new economy

President Obama stated in his recent State of the Union Address that America’s future will come from rebuilding a strong middle class. However, the belief that the solution to moving forward is to resort to the old manufacturing economy is wrong. If we look back over the past 20 years to where the greatest number of jobs have come from, the answer is new-economy companies like Apple, Google, Amazon and Starbucks, which each employ about 300,000 people.

We are now in an “innovation economy” growth phase cycle, and because it is specifically dependent on IPOs – with 92 percent of job growth for companies occurring post-IPO– one can easily connect the lack of growth and jobs over the past decade right back to when IPOs became blocked.

To deliver middle class jobs in the U.S., Mr. Obama needs to focus on creating more tech jobs – which, according to Moretti’s multiplier of five, spawn three middle-class jobs and two professional jobs each.

Preparing CEOs for today’s market realities

What is most wrong with the system is that it is skewed to incentivize short-term focus. Today’s high frequency trading benefits from volatility and in effect creates pump-and-dump scenarios. For IPOs, that translates to often wild price fluctuations, with from 300 to 500 percent of IPO allocations usually trading within the first 48 hours of a company’s offering.

The solution is for company CEOs to take back the reins and factor in aftermarket trading. Managing your shareholder base composition is a basic investor relations function that companies need to begin developing years prior to IPO, including inviting key shareholders into late-stage private rounds. A good rule of thumb is to aim for 60 to 70percent long-term holding base for stability, and 30 to 40 percent short-term holders for liquidity. This yin-yang balance will support a perception that matches reality (fundamental performance).

Without a core of growing companies (that are appropriately valued), the economy will simply keep generating more uncertainty and distrust, further limiting good, young companies’ ability to hire and grow.

Mona DeFrawi is founder and CEO of Equidity, a firm that matches investors with private companies. Follow her on Twitter @MonaDeFrawi.

Have an idea for a post you’d like to contribute to GigaOm? Click here for our guidelines and contact info.

Photo courtesy Everett Collection/Shutterstock.com.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Fewer IPOs in 2012, but venture investors enjoyed bigger payoffs [charts]

Rani Molla — Wed, 02 Jan 2013 17:55:37 +0000

Both the number of venture-backed initial public offerings (IPOs) and the number of mergers and acquisitions (M&As) decreased in 2012, but their average values increased, according to a report released today by Thompson Reuters.

The Exit Poll report, conducted in conjunction with the National Venture Capital Association (NVCA), makes clear something we’ve known for a while: IPOs aren’t as popular as they used to be. The average offer amount for IPOs has gone up 225 percent since 2007; the average offer amount for M&As has gone up 16 percent in that same time. Both have seen fewer deals in 2012 than they did five years ago.

According to the report, the information technology sector led with the highest total deal size.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Who’s getting ready for an IPO? Chances are, it’s an enterprise company

Eliza Kern — Thu, 06 Dec 2012 05:01:06 +0000

After recent IPOs like Groupon, Zynga and Facebook, perhaps it’s not surprising that the next generation of technology IPOs is likely to come from enterprise-oriented companies. A new report from the analysts at CB Insights breaks down those companies and their investors, noting that not all of these companies are necessarily headed toward an IPO, but pointing out that those companies do demonstrate where the big money in technology might lie.

The report, which can be found in its entirety online here, looked at 472 private technology companies estimated to be worth $100 million or more. Here are a couple of interesting points that caught my eye:

Big companies still cost big money: It might be fairly cheap to build a software app and do a startup (as the Lean Startup approach advocates), but growing that business to larger valuations and a potential IPO still costs money. Of the companies the report evaluated, the median funding per company is $75.8 million, with an average of $84.7 million.
Selling to businesses over consumers pays: 80 percent of the companies in the study target their services at other businesses, as compared to strictly consumer businesses.
Mobile and telecom come in behind internet for top sectors: Internet companies dominate the list, making up 229 of the 472 total, but mobile and telecom companies, like those focused on wireless connectivity and broadband services, are doing well too, with 76 companies represented.
New York and Massachusetts vie for second place: California still tops the list of where the companies come from, but the two northeast states are essentially tied for second.
It takes time to grow a company: Not surprisingly, the companies topping the list weren’t built overnight. One-third of the companies raised their first financing more than seven years ago.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Report: SolarCity IPO before the end of the year?

Katie Fehrenbacher — Sat, 24 Nov 2012 17:38:51 +0000

Solar installer SolarCity filed for a potentially $201 million IPO back in April and the solar industry — and cleantech watchers — have been waiting to see when the startup would debut. Well, according to a report in Reuters this week, SolarCity plans to go public before the end of the year, and the move was delayed a bit by super storm Sandy.

Based in San Mateo, south of San Francisco, and founded in 2006, SolarCity wants to be listed on the NASDAQ under the symbol “SCTY.” The company recorded $59.55 million in revenue and $73.71 million in net losses in 2011, compared with $32.43 million in revenue and $47.07 million in net losses in 2010. For the first six months of this year, the company posted $71.42 million in revenue and $48.91 million in net losses.

If SolarCity has a successful IPO it could be an important bellweather for venture-backed solar and next generation energy technology exits. There have been very few in 2012 — for example, solar project developer BrightSource ditched its planned IPO because it wasn’t getting the valuation it wanted.

The company raised $200 million in venture funding, and its investors include Draper Fisher Jurvetson, DBL Investors, Generation Investment Management and Tesla Motors’ CEO Elon Musk. This would be the second large IPO for Musk’s investments, following Tesla.

SolarCity was one of the early crop of solar installer startups which used financing options, such as leases and power purchase agreements, to attract customers. With these types of financing arrangements, home or business owners don’t have to pay the expensive upfront cost of buying and installing solar panels, and SolarCity covers that cost. The homeowner, instead, pays a monthly fee for the energy. SolarCity has raised hundreds of millions of dollars from banks such as U.S. Bancorp and from corporate investors such as Google to pay for these upfront costs.

SolarCity has also moved aggressively into energy efficiency audits, and plans to expand that business going forward. Here’s 5 things you should know about SolarCity’s IPO (and they aren’t all good).

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Wi-Fi networker Ruckus raises $126 million in IPO

Kevin Fitchard — Fri, 16 Nov 2012 22:52:03 +0000

Wireless networking startup Ruckus Wireless graduated to public company status on Friday, appearing on the New York Stock Exchange under the ticker RKUS after clearing $126 million in an IPO. Ruckus sold 8.4 million shares at $15 a piece, valuing the company at $1.2 billion, but when trading commenced this morning the stock price fell steadily throughout the day closing at $12.30.

Based in Sunnyvale, Calif., Ruckus makes both enterprise and carrier-grade Wi-Fi gear, which mobile operators use to augment their 3G and 4G mobile broadband networks. Wi-Fi has been a hot space in wireless in the last two years, as carriers look for ways to add cheap and plentiful capacity. Ruckus and its biggest competitor BelAir Networks both benefited from the trend, landing huge carrier deals to build massive outdoor Wi-Fi systems. BelAir got acquired by networking giant Ericsson, but Ruckus opted to remain independent, partnering with Ericsson’s competitors.

While the company’s initial investors sold off 1.4 million shares, its largest venture capital investor Sequoia Capital stayed all in and now owns 24 percent of the public company, BusinessWeek reported. The company’s co-founders Bill Kish and Victor Shtrom are remaining with Ruckus, serving as CTO and chief wireless architect respectively. The CEO role remains in the hands of Selina Lo, a veteran of another startup that went public Alteon Websystems.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.