Few Complete IPOs, But Many File

With stock exchanges in choppy condition, few venture-backed companies ventured out to the public markets in August and September.

But, in a sign of optimism that conditions will improve in the near-term, a large number of companies have filed to go IPO over the next few months.

At least nine VC-backed companies registered to go public between August and mid-September, seeking to raise nearly $800 million in combined proceeds. The list includes several high-profile private companies, such as Jive Software, a provider of social media tools for enterprise customers, and Brightcove, developer of an online video platform that has raised more than $100 million in venture funding to date.

Yet over the same period, just two venture-backed companies—Carbonite, a provider of data back-up services, and Tudou Holdings, a Chinese video website—have actually made it to market.

Carbonite did so only after slashing its expected offering size nearly in half. Tudou priced at the midpoint of its expected range in August, but saw shares slump in early trading.

Labor Day brought a further slowdown. No venture-backed companies carried out IPOs in the first half of September, despite a pipeline that includes some large and closely watched companies, such as Zynga Game Network and Groupon.

“The macroeconomic climate has been so unpredictable that it’s creating a lot of anxiety among investment bankers about whether the time is right to take a company public,” says T. Hale Boggs, a partner at Manatt Phelps & Phillips. Boggs says he doesn’t expect a robust IPO environment in the near future, given the current economic and political conditions.

Instead, many companies are removing themselves from the pipeline. A total of 23 companies in registration withdrew or postponed their offerings in August, a magnitude of retreat unseen since April 2001, when 23 withdrew or postponed amid a deflating U.S. tech bubble, according to Ipreo, an investment analysis provider.

The current list includes several VC-backed companies, including compliance software provider Trustwave Holdingsand benefits service WageWorks.

The two that did make it out received a mixed reception.

Tudou shares were down slightly from their mid-August offering price, with a market cap of about $650 million. Shareholders include GGV Capital (12.1% pre-IPO stake), IDG Technology Venture Investment (11.4%), General Catalyst Partners (8.2%), JAFCO Asia Technology Fund (5.3%) and Venrock (4.7%). Previously, the Shanghai-based company raised at least $135 million in venture funding, according to Thomson Reuters (publisher of VCJ).

The macroeconomic climate has been so unpredictable that it’s creating a lot of anxiety among investment bankers about whether the time is right to take a company public.

T. Hale BoggsPartnerManatt Phelps & Phillips

Carbonite shares spiked in first-day trading, but settled back in the subsequent weeks, with the market cap hovering at about $300 million in mid-September. Shareholders include Menlo Ventures (31.6% pre-IPO stake) and Crosslink Capital (5.7%). Boston-based Carbonite previously raised about $70 million in venture funding.

Among the venture-backed companies that added their names to the IPO pipeline are the following:

• Palo Alto, Calif.-based Jive Software, a developer of social software for enterprise customers, filed to raise up to $100 million. Its backers include Sequoia Capital (36% pre-IPO stake) and Kleiner Perkins Caufield & Byers (14%). In three rounds since 2007, the company has raised more than $57 million in VC funding.

• Cambridge, Mass.-based Brightcove, provider of an online video platform, filed to raise $50 million. Formed in 2004, Brightcove has raised more than $100 million in venture capital. Its largest backers are General Catalyst Partners (26.6%) and Accel Partners (24.5%).

• Vienna, Va.-based Eloqua, a provider of software for marketers, filed to raise up to $100 million with a debut on the Nasdaq. Founded in 1999, the company has raised $41 million in venture funding, according to Thomson Reuters. Its largest backers include JMI Equity (34%), Bay Partners (25.8%) and Bessemer Venture Partners (21.3%).

• San Diego-based Genomatica, a developer of bio-engineered chemicals for industry, manufacturing and cleantech applications, is seeking to raise up to $100 million. Shareholders include TPG Biotechnology Partners (19.1%), Mohr Davidow Ventures (17.3%), VantagePoint Capital Partners (12.6%), Alloy Ventures (10.4%) and Draper Fisher Jurvetson (7.0%).

• Austin, Texas-based Bazaarvoice, a provider of tools for marketers to analyze social media, filed in August to raise as much as $86.25 million via an IPO. Austin Ventures is the company’s largest shareholder (with a 35%), followed by Battery Ventures (18.6%) and Eastern Advisors Capital Group of New York (10.6%).

Angie’s List, an Indianapolis, Ind.-based consumer review site for service providers, filed in late August to raise $75 million. Its largest shareholders are TRI Investments (23.1%), Battery Ventures (18.2%), BV Capital (11.6%) and T. Rowe Price(9.8%).

JTH Tax, the Virginia Beach, Va.-based operator of the Liberty Tax preparation franchise, is seeking to raise up to $90 million. Backers include Edison Venture Fund (10.2%) and Envest Funds (6.3%). The company previously raised $20.4 million in venture funding, according to Thomson Reuters.

Guidewire Software, a San Mateo, Calif.-based developer of software for the insurance industry, filed to raise $100 million. Shareholders include U.S. Venture Partners (29.9%), Bay Partners(24.5%) and Battery Ventures (6.3%). Guidewire previously raised $19.5 million in venture funding, according to Thomson Reuters.

MobiTV, an Emeryville, Calif.-based developer of video services for mobile devices, is seeking to raise $75 million. Backers include Gefinor Ventures(23.1%), Oak Investment Partners (20.1%), Menlo Ventures (13.3%) and Redpoint Ventures(13.3%).