The world may be waiting on a Facebook IPO. And while there’s some chatter about whether the $5 billion public offering from the social networking giant will open the floodgates for tech offerings, The Wall Street Journal today notes that it might be a new breed that actually woos Wall Street: enterprise IT companies.
That’s in contrast to the Zillows and Groupons and LinkedIns of the world that went public in 2011. The Journal quotes Madrona’s Matt McIlwain who says that enterprise IT firms have “compelling and repeatable” business models.
That could be good news for Seattle, which historically has produced some of the behind-the-scenes IT infrastructure and business services that help power the Internet or make enterprises more efficient. (F5 Networks, Concur, Isilon Systems, etc.).
With that in mind, I started wondering which Seattle area companies actually might take the IPO plunge in 2012. Pretty quickly I came up with five names which show the diversity of the technology industry in Seattle. Now, it’s unclear to me whether any of these will pull the trigger, and few will tell you if and when they plan to drop an S-1 filing. But, nonetheless, here’s my short list. Who did I miss?
After raising a $37 million venture capital round last summer from venerable venture capital firm Kleiner Perkins Caufield & Byers, INRIX CEO Bryan Mistele told GeekWire that his Kirkland company was already bigger than Zillow. A spin off from Microsoft Research, INRIX’s traffic data now powers most of the major navigation applications and is now available in 30 countries. Solidly profitable and growing, the company bought its main European rival in August for $60 million.
Mistele has not hidden his intentions for an IPO, telling GeekWire last year that traffic analysis is a billion dollar opportunity. “We are certainly on the path of wanting to take this business public,” he said in July.
Big Fish Games:
Seattle’s under appreciated gaming industry has already seen some fantastic exits in the past year, namely EA’s buyout of PopCap and IGT’s acquisition of Double Down Interactive. Big Fish certainly has the revenue numbers to go public, posting $140 million in sales in 2010. Founded in 2002 by former RealNetworks manager Paul Thelen, Big Fish named former Amazon.com and Procter & Gamble finance exec David Stephenson as CFO last year.
Long discussed as a possible IPO candidate, Big Fish hasn’t grown as fast as social media gaming powerhouse Zynga which went public last year and now boasts a market value of nearly $10 billion. If Big Fish doesn’t take the plunge in 2011, could Seattle’s surprise gaming hit actually be the wildly successful (and super low key) Valve?
Apptio CEO Sunny Gupta makes no bones about it. He wants to build the next big enterprise software company in Seattle. He appears to be on that path. Speaking at the WTIA’s TechNW event in Seattle last year, Gupta noted that Apptio is on course for bookings of $50 million to $60 million in 2011. “We are trying to build something of substantial scale,” Gupta said at the time. “We run our business like we wanted to build a great product, a great market, a great new category as opposed to thinking about an exit.”
We’ve heard rumblings of a possible Apptio IPO filing in recent days, and Madrona’s McIlwain (who helped guide Isilon to an IPO and eventual sale to EMC) is a board member. Could McIlwain’s remarks to The Wall Street Journal have been an indirect hint about Apptio? Possibly.
Tableau’s IPO aspirations aren’t really a mystery. CEO Christian Chabot is an ex-VC and he’s long yearned to take the Stanford University spin out public. 2012 might be the year for the maker of data visualization products, especially if the trends around enterprise IT and “big data” hold steady. The Seattle company has experienced a significant growth spurt in recent months, and that momentum continues with Tableau announcing in January that it plans to add 300 workers this year. Sales doubled to $72 million in 2011, which means the company is starting to get into the ballpark where investment bankers take notice.
Daily deal sites were all of the rage in 2011. Will that momentum continue this year? If so, Zulily could take the plunge into the public markets. The company, which has kept a relatively low profile since it was founded by former Blue Nile executives Mark Vadon and Darrell Cavens, is one of the fastest-growing Internet upstarts in Seattle. Zulily has already outgrown three offices in its short history, and our sources said the company was on pace last year to top $150 million in revenue.
Former Big Fish and aQuantive exec Michael Vernon joined as CFO last year — a possible sign of IPO dreams. [Update: As a GeekWire reader noted in the comments below, Vernon has left the company. We confirmed Vernon's departure with Cavens who declined to comment on the departure. The company continues to look for a CFO]. Zulily raised a massive $43 million venture capital round from Meritech Capital and others that valued the company at about $750 million. Too bad Zillow already nailed down the Nasdaq ticker symbol “Z.”
And just for fun of it here’s a wild card to toss into the mix: Redfin. Even though CEO Glenn Kelman recently remarked that the company is not ready for a public offering, Zillow’s success in the marketplace has got to being weighing on the minds of the investors. Interestingly, Redfin just posted a job for a general counsel, certainly a position that would be needed for a company thinking about taking the IPO leap.
“We have some things we have to work out before we go public,” Kelman told us last month after the company cut the rebates it offers to home buyers.
It seems like it could be another year before Kelman and board decides to go for it. But if the real estate market shows signs of life and Redfin can gain market share in the cities where it operates, they could jump to.
Who did I miss?
[Diving photo via Bigstock]