initial public offerings (IPOs) trading on American exchanges

Thursday, December 5, 2013

Upcoming IPOs

While the tech IPO market sizzled in the third quarter and through October, just four tech IPOs have launched post-Twitter. There is just one tech IPO that has priced in preparation for the start of trading, Nimble Storage.

The best-performing tech IPO since Twitter is online retailer Zulily (ZU), up 71% on its Nov. 15 debut. Two China-based companies launched Nov. 22: Online lottery services provider (WBAI) rose 54% in its debut, and mobile app developer Sungy Mobile (GOMO) rose 20%.

Though 2013 has been a strong year for tech IPOs, Twitter did not have a ripple effect, says Scott Sweet, senior managing partner at research firm IPO Boutique.

"It hasn't brought a cavalcade of techs to the IPO window," Sweet said, "even though Twitter met everyone's expectation."

Francis Gaskins, founder of and research director of, says the market for tech IPOs has calmed down since Twitter's debut.

"It may be that the good tech IPOs have already gone out," Gaskins said. "The best companies go first and the secondary companies bring up the rear."

The lull likely will end early next year. Here's a rundown on some IPOs expected in early 2014:

Alibaba Group
Alibaba Chairman Jack Ma is expected to take China's No. 1 e-commerce firm public in the U.S. in early 2014.

Founded in 1999 by Jack Ma, Alibaba is China's largest e-commerce company, with businesses similar to (AMZN), eBay (EBAY) and others.

Alibaba comprises nine companies. They include shopping sites Taobao Marketplace and Tmall, a payment processor business similar to PayPal called Alipay, a business similar to Groupon called Juhuasuan and a search engine called Etao. It also has a cloud-computing business and a business-to-business site.

According to projections by research firm PrivCo, Alibaba's projected offering could exceed $18 billion, with the company getting a market valuation near $110 billion. Facebook raised $16 billion in its IPO, and had a market capitalization that day of $104 billion. It's now valued near $114 billion.

In the second quarter, Alibaba revenue rose $60% from the year-earlier quarter to $1.73 billion, according to figures released by Yahoo (YHOO), which holds a 24% stake in Alibaba. Net income more than doubled to $707 million.
PrivCo estimates Alibaba will have sales of $6.85 billion this year, up 68%.
The IPO is expected to launch in January or February.

The San Francisco-based company, launched in 2009 by Jim McKelvey and Twitter co-founder Jack Dorsey, provides various payment-processing services for mobile phones and tablets. Its first creation was a credit card reader that plugs into smartphones and tablets, which can be used to accept credit card and debit card payments. It also offers an app, called Square Wallet, that lets customers pay for goods or services using smartphones.

Raised $200 Million
In September 2012, Square raised more than $200 million in a financing round that reportedly valued the company at $3.35 billion. At the time, Square said it was processing more than $8 billion in payments on an annualized basis.

In early November, the Wall Street Journal reported that Square had held discussions with Goldman Sachs and Morgan Stanley, among others, about a 2014 IPO. It said Square revenue this year would approach $550 million on total payment volume near $20 billion. Investors include Citigroup (C), Rizvi Traverse Management and Starbucks (SBUX).

San Francisco-based Dropbox provides a cloud-based online storage service with a "freemium" business model. Users get two gigabytes of free storage space and can pay for additional storage and enhanced security. It has a reported 200 million users, double the level of a year ago.

According to media reports, Dropbox is trying to raise $250 million in funding that would give the 6-year-old company a valuation of more than $8 billion. In 2011, it raised $250 million, at a valuation of $4 billion. It could make its IPO early next year.

Dropbox was founded in 2007 by Drew Houston and Arash Ferdowsi as a consumer service, but it's since shifted its focus to the enterprise market. Dropbox says it has 4 million business customers. Revenue in 2012 reportedly doubled to $116 million. Investors include Sequoia Capital and Accel Partners.

Similar to Dropbox, Box provides a cloud-based file-sharing service for businesses.
It also uses a freemium business model, providing 10 gigabytes of free storage, with a fee for additional storage. Box says it has more than 180,000 business customers and 20 million users.
The company was founded in 2005 by Aaron Levie and Dylan Smith and is based in Los Altos, Calif.
According to Reuters, Dropbox has selected Morgan Stanley, Credit Suisse and JPMorgan to lead a proposed IPO that could raise about $500 million.

Box reportedly is in the process of raising $100 million from private investors, which would give it a valuation near $2 billion. It raised $125 million in June 2012, at a valuation of $1 billion.
Investors include Andreessen Horowitz, Bessemer Venture Partners, Draper Fisher Jurvetson, (CRM), SAP (SAP) Ventures and Intel (INTC) Ventures.

The Pinterest website lets users post photos, images and other Web-related content to their profile page, which other users can follow, a process termed as "pinning." According to a report by Semiocast in July, Pinterest has more than 70 million registered users and about 20 million active users.

Pinterest recently completed a $225 million funding round that included Fidelity Investments, giving it a valuation of $3.8 billion. It raised $200 million in February, with a valuation of $2.5 billion.

The San Francisco-based company reportedly has begun testing "promoted pins," which are paid advertisements.

Pinterest was founded in 2010 by Ben Silbermann, Evan Sharp and Paul Sciarra. Investors include Andreessen Horowitz, FirstMark Capital, Bessemer Venture Partners, Valiant Capital Management and Highline Venture Partners.

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