5 Tech IPOs For 2013 From Cloud Events To Ultrafast Chips

5 Technology Innovators Could See Bright 2013 IPO Debuts

on December 31 2012 12:10 PM
Cloud Computing
IBM announced a deal with STMicroelectronics and start-up Shaspa Research to link cloud computing to so-called “smart homes” of the future. smallbiztechnology.com

 

Not all technology initial public offerings in 2012 were as disastrous as Facebook (NASDAQ:FB), which looks likely to end the year down about 31 percent from its initial offering price of $38. In September, Facebook shares dipped as low as $17.45.

Indeed, the second-best IPO of 2012 is Workday (NYSE:WDAY), the second act of the dynamos who invented PeopleSoft, which attracted the eye of Oracle Corp. (NASDAQ:ORCL) in 2006 and resulted in a $10.3 billion takeover in 2005.

Shares of Workday, of Pleasanton, Calif., have soared 91 percent since their October IPO pricing. For co-CEOs David Duffield and Aneel Bhusri, it's a second jackpot, which also typifies a trend that venture capital firms like to put their money behind proven entrepreneurs.

To be sure, while there are billions in venture capital funds waiting to find a new home, the big technology giants such as Oracle, Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG), International Business Machines Corp. (NYSE:IBM) and other acquirers are all sitting atop huge cash piles.

So rather than go public, they make bids either just before an IPO or shortly after. Oracle's last announced deal of 2012 was for Eloqua (NASDAQ:ELOQ), a Vienna, Va., developer of cloud marketing software, for $810 million. The company had only been public for four months.

Oracle, though, is paying a 32 percent premium for the shares.

Hope springs eternal for technology investors. Here are five prospects for an IPO in 2013:

Cloudera Inc.

Market capitalization: $700 million (private)

Reason: The IPO of 2013

This startup, already the leader in the Big Data technology called Apache Hadoop, which deals with giant databases and how they are managed and deal with unstructured data, could likely be the technology initial public offering to watch in 2013.

The Palo Alto, Calif.-based company this month raised an additional $65 million in venture capital from top investors including Accel Partners, Greylock Partners, Ignition Partners, In-Q-Tel and Meritech Capital Partners.

That brings the cumulative amount raised to $140 million, with a $700 million valuation on the whole company.

The big players in Big Data such as IBM, AT&T (NYSE:T) and Oracle already use Cloudera software, which is available free. But the question is making money off applications.

Cloudera CEO Mike Olsen sold his last company, SleepyCat Software, the developer of the Berkeley database software, to Oracle. New CFO Jim Frankola had been in the same post at Yodlee, another cloud service company, as well as with Ariba before it was acquired this year by Germany's SAP (NYSE:SAP).

Given the preoccupation with the cloud, Cloudera could be the hottest IPO of 2013. Shares of Splunk Inc. (NASDAQ:SPLK), a Big Data IPO of 2012, closed up 66 percent from their IPO price and have traded far higher.

Acquia Inc.

Market capitalization: $500 million

Reason: Cloud publishing software

This Burlington, Mass., startup is the second coming of developer Dries Buytaert, who created the open-source Drupal publishing software. Established in 2007, under CEO Tom Erickson it now claims 2,400 customers, including Time Warner Inc. (NYSE:TWX), Twitter, NPR and Stanford University.

In November, Acquia closed its latest financing round, with a new $30 million from Investor Growth Capital, Goldman Sachs (NYSE:GS), Accolade Partners, North Bridge Venture Partners, Sigma Partners and Tenaya Capital.

Various Acquia products for marketing and publishing, including Open Web Experience Management or OpenWEM and Insight have been used by professionals to tap cloud possibilities.

As well, the company was tabbed by market researcher Gartner (NYSE:IT) as a "visionary" of its “magic quadrant” for software content management companies in September. Companies with “magic quadrant” status often go right onto the takeover target list of acquirers, as well as investment banks seeking a sexy IPO. That might explain the new investment of Goldman Sachs.

Dropbox

Market capitalization: $5 billion

Reason: Cloud storage for consumers

This San Francisco-based startup has been selling cloud-based storage to consumers since 2008 and now claims at least 100 million accounts.

It's also raised nearly $260 million in venture capital from blue-chip investors Sequioa Capital, Accel Partners and Amidzad, as well as from Bono, the U2 star, through his personal account, not from Elevation Partners, where's he's also a partner.

Under founder Drew Houston, Dropbox developed a language called Python, which is good for storage as well as for file synchronization. That means customers can update their stored data anywhere using a smartphones as well as PC.

Dropbox already has close relations with Amazon.com (NASDAQ:AMZN), the No. 1 e-retailer, because it depends upon Amazon Web Services for support, as well as with Facebook, which offers members sharing resources to update group pages.

So Amazon or Facebook might want to bring Dropbox inside the fold. As well, the company faces hot competition from other private companies such as SugarSync, of San Mateo, Calif., and Exablox, of Mountain View, Calif., as well as from Google.

Or a pure storage specialist such as EMC (NYSE:EMC), the top provider, might eye Dropbox to seize a piece of the consumer sector.

Still, assuming Dropbox is a moneymaker, the company could tap into its strong consumer base for a strong IPO

Cvent

Market capitalization: uncertain

Reason: No. 1 cloud event marketing company

Chances are business people have used Cvent's software without knowing it, registering for a financial conference, trade show or exposition. Its customer list includes American Express Co. (NYSE:AXP), State Street Corp. (NYSE:STT) and the American Bar Association.

Founded in 1999 by CEO Reggie Aggarwal, who told VentureBeat he'd eye an IPO next year, Cvent has raised more than $150 million in venture capital, mainly from New Enterprise Associates and Insight Venture Capital.

After a huge slowdown and layoffs, Cvent revamped and saw a surge in business, reporting profitable operations that returned in 2003. Business has increased since then, as the company has boosted its payroll above 1,100.

The company claims to have managed more than 500,000 separate events and conferences, handled 30 million event registrations and e-mailed more than 850 million e-mail invitations.

Several companies in the field are already public, such as Active Networks (NYSE:ACTV), of San Diego, whose shares have lost 61 percent in 2012. But Cvent might be able to flaunt its blue-chip customer list plus the cloud to score a hit with shareholders in 2013.

Xtera Communications Inc.

Market capitalization: uncertain

Reason: optical chips ideal for high-speed networks

This little-known optical chip developer in Allen, Tex., has developed high-speed products capable of sending data at incredible speeds across new networks. It's also attracted cash from some of the best technology investors, including Sevin Rosen and New Enterprise Associates.

Earlier in December, IBM's Solomon Assefa, research staff member for silicon nano-photonics at its Watson Research Center, said Xtera's chip was likely the only one in the market now to compete with a comparable one from IBM to transmit a Terabit, or a trillion bits of data.

Founded in 1998, Xtera's has raised about $300 million in venture capital over the years, which could mean its investors are finally seeking to cash out. Annual revenue last year was estimated around $49 million.

Xtera has also been very successful selling its optical chips to new Chinese network providers.

Given that the company's chairman is Sevin Rosen's Jon Bayless, an IPO filing would win immediate attention and credibility, which could make Xtera a top semiconductor offering for 2013.

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