Wireless companies expected to launch IPOs in 2012 and beyond
Millennial Media, the nation's largest independent mobile advertising network, filed for an IPO in January, hoping to raise up to $75 million. Earlier this month, social networking giant Facebook filed for a $5 billion IPO, putting the company ahead of Zynga, which raised $1 billion in its IPO last year, the largest offering by a U.S. tech firm since Google (NASDAQ:GOOG) generated $1.9 billion in 2004.
What do all of these companies have in common? They're all major players in the mobile space that are publicly traded or plan to launch public stock offerings this year.
Not all IPOs are success stories, though. Groupon, which initially sought a valuation of $20 billion, had to downsize that figure dramatically after the SEC questioned the company's accounting practices. In addition, Groupon suffered a huge loss last quarter; the company posted a net loss of $42.7 million, or 8 cents per share, albeit better than the previous year when it lost $378.6 million, or $1.08 per share, as a private company.
On a similar note, Zillow suffered a sluggish public opening. Shares in the company, an online and mobile real estate marketplace, closed lower than the opening on the first day of trading.
Some companies, like Google, continue to blossom after going public, while others see a series of losses. But the situation hasn't stymied interest in public markets, and there are a number of wireless companies that likely are angling for an IPO this year.
While it's difficult to say for sure which wireless companies are planning to file an initial public offering--venture capitalists aren't telling, and neither are the companies--the below list are the companies most likely to go public in 2012.
(To be clear: Fierce does not have any insider information on which private companies in the mobile sector intend to go public. Our predictions are based on public information, company statements and general trends in different parts of the market.)
Ruckus Wireless - Ruckus Wireless, which provides carrier-grade Wi-Fi network products, recently raised $21.7 million in a mezzanine round of funding so it can invest more heavily in its carrier infrastructure business as well as continue building its enterprise wireless LAN business. The latest funding round was led by new investors Meritech Capital Partners and SingTel Innov8 and was joined by previous investors. Ruckus has so far raised $72.7 million since opening its doors in June 2004. Ruckus also added two new board members: Dick Lynch, former executive vice president for strategic technology initiatives at Verizon Communications, and Georges Antoun, who most recently served as head of product area IP & broadband networks for Ericsson. The activity should help position Ruckus for a successful IPO down the line. David Callisch, Ruckus' vice president of corporate marketing, told FierceBroadbandWireless that the company has long intended to go public, but has never set a specific deadline for an offering.
Twitter - Twitter's co-founder Biz Stone has repeatedly stated that the company is not interested in going public, but an IPO could be in the company's future in 2013. At the moment it isn't urgent for Twitter to go public, but the company does seem to be readying itself for an IPO. The company's board members have shuffled, with venture capitalists like Fred Wilson and Bijan Sabet leaving, and industry veterans with experience in publicly traded companies quickly joining the ranks. Twitter has also been on an acquiring spree, bringing in new products and talent onboard. Last year also saw the integration of Twitter into iOS 5. If Facebook's foray proves successful, a Twitter IPO may not be far away.
Dropbox - Dropbox, an online file hosting service, has received more than $257 million in VC funding, and its speculated valuation is in the range of $5 billion to $10 billion. With cloud storage gaining in popularity and users looking to access data on-the-go, Dropbox could use an IPO to gain scale and visibility. The company draws users that want to store personal files as well as businesses that want to share large documents with colleagues and clients. With its user base of 45 million users uploading more than 1 billion files every three days, its momentum isn't likely to wane any time soon.
Square - In 2011 mobile commerce made its way into the mainstream market. Square, a dongle that hooks up to iPhones, iPads and phones running Android, processes more than $11 million in mobile payments every day. Square collects 2.75 percent per credit card swipe, and already holds partnerships with Visa, AmEx, MasterCard and Discover. And with analysts including Juniper Research forecasting that NFC-enabled contactless transactions will continue to increase significantly, and some of the biggest IPOs to date coming from the financial sector, Square appears well positioned for an IPO.
Not quite ready:
Rovio Mobile - For one, Rovio Mobile has point-blank denied it will be filing for an IPO in 2012. And, with the company's flagship title Angry Birds continuing to dominate the charts of various app stores, why would it need to? Most app developers dream of achieving even half the success of the Angry Birds franchise, which has spawned sequels, stuffed animals, books and a feature-length film soon to come, all bearing the Angry Birds brand. That said, Rovio is likely to go public eventually, but filing for an IPO in the near future doesn't make much sense.
LivingSocial - After Groupon's struggles, which have only amplified since going public, it isn't likely that online and mobile daily deals business LivingSocial would choose to follow in its competitor's footsteps. In December, the company entered another funding round, hoping to raise an additional $400 million. That, at the very least, will delay LivingSocial from going public in the next few months. Lou Kerner, an analyst with Liquidnet, agreed, telling the Wall Street Journal, "For management [at LivingSocial] to take their eye off the ball and focus on IPO-ing is a detriment to the company."
Tumblr - Tumblr, a microblogging platform, with users on mobile and online, has been racking up venture capital. In its latest round, led by Sequoia Captial, the company raised $85 million, a large chunk of change for a company that has yet to crank out a profit in its four years. The site's monthly users have grown exponentially past 13 billion page views, but its mobile apps don't have the same traction as the main site. The less than stellar Pandora IPO may be a good warning to investors eager to take the company public.