Unprofitable Bazaarvoice Seeks $86.25M IPO

Brett Hurt
Brett Hurt

Bazaarvoice, which is backed by Austin Ventures and Battery Ventures, became the latest unprofitable VC-backed company to file for an IPO.

Austin, Texas-based Bazaarvoice filed Friday to raise as much as $86.25 million via an IPO. Morgan Stanley is lead book runner on the deal, which also includes Deutsche Bank and Credit Suisse. Other underwriters include Piper Jaffray, Pacific Crest Securities and BMO Capital Markets.

Bazaarvoice didn’t disclose how many shares it would sell or their price range. That information will come in future filings. However, the company said it plans to trade on either the Nasdaq or the NYSE under the ticker “BV.”

The company provides e-commerce software that lets companies add ratings and reviews to their sites. As of April 30, Bazaarvoice had 587 clients, including Microsoft, Petco, Best Buy, OpenTable and Macy’s.

Bazaarvoice is not profitable. The company generated about $64.5 million in revenue for the year ended April 30, 2011, according to an SEC filing. This is up 67% from $38.6 million revenue reported by Bazaarvoice in fiscal 2010. Net losses widened to $20.1 million in fiscal 2011, compared to a net loss of $8 million in fiscal 2010. Adjusted EBITDA in 2011 was -$13.3 million. The company also has an accumulated deficit of $40.8 million as of April 30, according to the filing.

Bazaarvoice, founded in 2005, has raised a total of $29.6 million in venture capital, according to Thomson Reuters (publisher of peHUB). Its backers include Austin Ventures, Battery Ventures, European Founders Fund Management GmbH and First Round Capital. Austin and First Round led the company’s $4 million Series A round in January 2006, with Austin putting up $2.97 million and First Round contributing $1.03 million, according to Thomson Reuters. The valuation on that round and subsequent rounds was not disclosed.

Austin Ventures is the company’s largest shareholder, with a stake of about 34%, while Battery has 18.6% and Eastern Advisors Capital Group of New York holds a 10.6% stake. Brett Hurt, the company’s founder and CEO, owns 14.3% of the company.

The filing does not list the stock ownership of First Round or European Founders Fund, apparently because they hold stakes of less than 5 percent.