Upcoming IPOs

We are in the heart of the good season of IPOs, and it is looking a bit more promising than it started. Two weeks ago a retirement plan management service, Financial Engines (FNGN), priced above its range and shot up 44%. This improves on a prior financial-services play, QuinStreet (QNST), which priced below its range and sits only 10% above the issue price six weeks later.

Last week a telecom technology firm, Calix (CALX), priced at the top of the range, went up about 15% on the first day, and has settled back 5% above issue price. A fabless chip company, MaxLinear (MXL), priced above the range and shot up 33%.

This week five more are expected to go out, including Meru Networks (MERU), an enterprise wireless LAN provider, and another financial-services play, SS&C Technologies. A lot of these IPOs were started in the ’90s (and some like SS&C in the ’80s), but Meru was started more recently, in 2002, and MaxLinear in 2003. For the VC industry, it is heartening to see 2000-era core technology firms get out. (SS&C is of more interest to private equity firms, which took it private in 2005 and are now taking it public again.)

The IPO market is still tentative. Only four of the seven expected issues got out last week. Some of the laggards, like Redgate (RGM), are trying to roll forward and price day-to-day. It is selling bus advertising space in China, so it casts a bit of a damper on the China-is-a-field-of-dreams story.

Looking forward to the heart of Silicon Valley VC dreams, Nexsan (NXSN), a data storage play, is expected to go out in early April. After that ReachLocal (RLOC) hopes to get out. Reach is a the leader in local online advertising, and will be a great indicator of the robustness of appetite for Internet ad-based IPOs. — Disclosure – I have an indirect VC interest on both of these.

About Duncan Davidson 228 Articles

Affiliation: NetService Ventures

Duncan is an advisor to NetService Ventures, where he focuses on digital media and the mobile Internet.

Previously he was at four start-ups: Xumii, a mobile social service based on a Social Addressbook; SkyPilot Networks, the performance leader of wireless mesh systems for last-mile access, where he was the founding CEO; Covad Communications (Amex: DVW, $9B market cap at the peak), the leading independent DSL access provider, where he was the founding Chairman; InterTrust Technologies ($9B market cap at the peak), the pioneer in digital rights management technologies, now owned by Sony and Philips, where he was SVP Business Development and the pitchman for the IPO.

Before these ventures, Duncan was a partner at Cambridge Venture Partners, an early-stage venture firm, and managing partner of Gemini McKenna, a joint venture between Regis McKenna's marketing firm and Gemini Consulting, the global management consulting arm of Cap Gemini.

He serves on the board or is an adviser to Aggregate Knowledge (content discovery), Livescribe (digital pen), AllVoices (citizen journalism), Xumii (mobile social addressbook), Verismo (Internet settop box), and Widevine (DRM for IPTV).

Visit: Duncan Davidson's Blogs

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