Another Unprofitable (But Growing!) Web Company Files Its S-1: Active Network

The Active Network, a San Diego-based holding company that runs numerous fitness and outdoors oriented Web sites, has filed to go public.  It is planning to sell about $150 million of common stock to repay debt.

Since its 1999 founding as a registration site for endurance races, the company has garnered north of $200 million in equity and debt from a long line of institutions that includes ESPN, North Bridge Venture Partners, Canaan Partners, Austin Ventures, and ABS Ventures.

According to Active’s filing, just four investing entities are meaningful stakeholders at this point. ESPN owns 22.4% of the company; Canaan Partners owns 16.1%; Elicia Acquisition Corp. owns 10.7%; and ABS Ventures owns 9.6%.

Given the numbers, it’s far from clear how Active — whose Web properties include,, and — will be received by public market investors.

In the first nine months of last year, Active enjoyed gross profits of $124 million, up from $60 million in 2007. Active makes most of its money through transaction fees for event registrations. It also enables people to reserve camping sites, search and book tee times at golf courses, and manage the operations of student activity funds and other participation-oriented activities, generating additional income by maintaining and hosting its software for those customers.

That’s the good news. The bad news is that Active saw a net loss of $18 million in the first nine months of last year – which isn’t much narrower than the $23.7 million it lost in 2009. And both Quantcast and Compete numbers suggest the network’s overall traffic numbers have been declining over the last six months. According to Quantcast,  Active was seeing 98,000 monthly unique visitors in January, down from 160,000 monthly unique visitors in August.

Clearly, many more people tend to be active in summer than right after the holidays. Still, Quantcast data suggests that Active sees similar ebbs and flows in traffic every year, even as it has diversified away from its original focus on sports. Indeed, Active, which already employs 1,400 people, has made numerous acquisitions in recent years to branch out into new markets. Just two weeks ago, it acquired Fellowship Technologies, which sells Web-based software to religious institutions. It paid for the company with roughly one million shares of common stock.

Active’s filing states that along with paying off debt, it may use additional proceeds from its offering to acquire complementary businesses and for “general purposes.”