Motricity, the Bellevue, Wash.-based company that provides back-end infrastructure to wireless carriers, including web portals, storefront and messaging platforms, has filed documents with the SEC today with the intention raising $250 million in an initial public offering. It will trade under the ticker “MOTR.”
The company, which has raised $267 million in venture capital and has promised an IPO since 2004 has not been without its controversies, but says it sees significant growth opportunities and would like to raise additional capital. The opportunities include expanding into international markets, such as Southeast Asia, India and Latin America, developing new technologies for the carrier; and acquiring companies.
It appears that some of the stock being sold will be owned by shareholders and it is not clear how much of the proceeds will go to the company. In the filing it simply says “Motricity will not receive any of the proceeds from the sale of the shares being sold by the selling stockholders.” The biggest shareholders are: Advanced Equities (26.4 percent), Carl Icahn (21.1 percent), New Enterprise Associates (8.38 percent), Technology Crossover Ventures (5.54 percent) and the company’s CEO Ryan Wuerch (4.98 percent). Well-known shareholder advocate Icahn got involved following Motricity’s of InfoSpace (NSDQ: INSP) Mobile.
Now that Motricity has filed for a public offering, the covers can now be pulled back on the company’s financials. It said its customers include the top five wireless carriers in the U.S., including Verizon Wireless, AT&T (NYSE: T), Sprint (NYSE: S), T-Mobile USA and TracFone Wireless, and that to date, more than $3 billion in revenue has been generated through its mobile data platforms. For the past 12 months ended Sept. 30, the company, which has 346 employees, generated revenue of $117.1 million. For the nine month period ended Sept. 30, the company’s net loss attributable to common shareholders totaled $28.8 million. As of Sept. 30, the company almost had $20 million in cash and equivalents.
A majority of its revenues come from its largest customers — more than half, or 55 percent, of its revenues come from AT&T, and 19 percent from Verizon Wireless. Its five largest customers accounted for about 67 percent of its revenues in 2008 and 83 percent of revenues for the nine months ended September 30, 2009.
The company definitely has its risks. Mostly, it has to contend with being an old-school infrastructure company in a fast-paced business climate where mobile is increasingly becoming open and leaving the old walled-garden approaches in the dust. It also said some of its contracts with its two biggest clients — AT&T and Verizon Wireless — will be expiring in mid-to-late 2010. Motricity addressed the concerns about where the open platforms are headed: “We derived 31% of our revenue based on the number of active mobile subscribers who accessed mobile content and applications through our customers