Two MA Tech IPOs to Watch

Two MA Tech IPOs to Watch

Buzz surrounding the local tech community has been perking up lately with the recent announcement of two IPOs. Just last week, Boston-based online retailer Wayfair announced plans to raise $350 million in an IPO scheduled for the fall.  Now, Cambridge-based HubSpot has indicated that they also have plans to go public with an IPO to raise around $100 million.

Employing 700 people and launched by MIT graduates Brian Halligan and Dharmesh Shah, HubSpot, an inbound marketing solutions provider, offers products based on a subscription business model. Analytics, blogging, SEO, social media, marketing automation and lead generation are offered under a single, centralized application. The company’s main clientele are medium-sized businesses with employed staff ranging anywhere from the teens to 2000 individuals.

Halligan owns 4.9 percent of the company and Shah’s stake is 8.8 percent. The founders believe in a corporate culture that provides employees with numerous ways to grow and informs them about nearly every every detail concerning the business.

David Skok and Larry Bohn, two venture capitalists with ties to the Boston area have a large stake in Hubspot with 17.1 percent held by Skok’s interest and 27.1 percent owned by Bohn’s General Catalyst. Last February, analysts estimated a potential valuation for Hubspot at around $1.3 billion after the IPO is held which was slightly under the marketing automation software company Marketo’s (MKTO) $1.7 billion valuation at that time.

In 2013, Hubspot generated revenue of $77.6 billion with a 50 percent growth rate over 2012. That is lower than the growth of Marketo which was $95.9 million in revenue and 64 percent growth last year. Since Marketo’s initial public offering a year ago, the stock has weathered with a 33 percent downturn in price. Losses for Marketo were $47.4 million in 2013 compared to $34.3 million for Hubspot. In the first half of 2014, losses for Hubspot were $17.7 million. Typically, software subscription companies are running in the red when they decide to sell shares of their company to the public.

According to their S-1 filing, Hubspot will trade on the New York Stock Exchange under the symbol HUBS.

Comments are closed.

Show Buttons
Hide Buttons