Viadeo, the world’s second-biggest online networking site for professionals after LinkedIn Corp., is not worried that Facebook’s tough stock market debut in May will dent social media valuations.
The Paris, France-based company, which has raised funding from IDinvest Partners, Ventech and others, is planning to go public in about two years.
And it’s not the only VC-backed with IPO dreams.
Box, one of the top prospects in Silicon Valley’s pipeline following Facebook’s IPO, has added three leadership positions in recent months as the company enters an expansion phase ahead of a public offering targeted for mid- to late-2013, CEO Aaron Levie tells Reuters.
Also, data analysis software company Tableau Software and developer tools maker Atlassian are among several small, business software developers preparing to go public in the next 12 months, hoping a growing market for cloud computing will shield them from the aftermath of Facebook’s botched IPO and Europe’s woes.
Sources familiar with the situation say that other prospective IPO candidates include AppSense, whose user virtualization technology allows people to use different devices; Marin Software, which offers an online advertising management platform; Rapid7, which makes network security software; Rally Software, a provider of project management tools; and CollabNet, which offers Web-based software development tools.
Facebook’s IPO, marred by technical issues and over- ambitious pricing, has dampened investor appetite for Internet stocks, but Viadeo’s strategy chief Olivier Fecherolle says that the impact on professional networks, such as LinkedIn, had been limited.
“The fact that LinkedIn’s valuation held up after the Facebook IPO is a sign that investors can tell the difference between these companies,” Fecherolle told the Reuters Global Media and Technology Summit in Paris last month.
“Professional social networks are well valued because it’s a more classical business and demand is more stable,” he says.
Viadeo, which targets professionals, job seekers and recruiters, has more than 45 million users and is seeking to position itself as the more international cousin of U.S.-based LinkedIn, which has 160 million users.
Viadeo’s users come mainly from Europe, China, India and Latin America. Fecherolle says that the company is focusing on expanding its clientele in markets like China, where it has 10.5 million members, before it starts to offer paid subscriptions, its main revenue source globally on these markets. Fecherolle says that the company’s expansion to Russia, in partnership with Finnish media group Sanoma, is on track to reach 1 million users by the end of the year.
The company shelved plans for an initial public offering in May 2011 to focus on growth in emerging markets and improving its profitability. In April, it raised $32 million from a group of investors in one of the largest European Internet investments in recent years.
“It was our last [funding] round before a possible IPO,” Fecherolle says. “We will use this money to accelerate the geographies we are targeting such as China and need time to execute [the plan] before coming back to potential investors.”
Levie—who started Box in 2005 as a dorm room project with CFO Dylan Smith at the University of Southern California—ruled out an IPO this year, but said the company was hiring executives with experience at public companies.
Box, which allows employees at companies to share files and collaborate on the cloud, has brought on new board member Dana Evan, who’s a former CFO at Verisign, as well as general counsel Peter McGoff, who guided secondary share offers at Informatica.
“It won’t be a 2012 exercise,” Levie told Reuters, referring to the IPO. “Even though the market is pretty amazing right now, there are some things we want to get done as a company. We see these moves as ways of building a strong foundation.”
Box has also hired top Salesforce executive Tom Addis to woo enterprise customers, which make up the bread and butter of Box’s revenue. In recent months the company has signed on customers spanning a wide swath of industries, from Dow Chemical to Viacom to tech startups Spotify and Pandora.
“We have customers in every vertical industry,” says Josh Stein, managing director at Draper Fisher Jurvetson, the venture firm that invested in Box when it was still three employees working out of a garage in Berkeley, Calif.
“It’s not just used by sales or marketing,” Stein told Reuters. “It’s used by every department. It’s like email.”
Levie said the company now has amassed 10 million individual and 120,000 business users. Revenue has tripled over the past year, he says, although he declined to provide specifics.
Box recently raised $82 million in funding that valued the company at over $650 million, according to regulatory filings analyzed by venture capital data provider VC Experts. Box has now raised some $160 million from DFJ,Scale Venture Partners, U.S. Venture Partners, New Enterprise Associates, Andreessen Horowitz and others.
Box reportedly received a $600 million takeover bid from Citrix prior to its latest funding round last year, an offer that was considered by investors, but ultimately rejected by co-founders Levie and Smith.
Since then, Box’s investors have moved to publicly affirm their desire to usher the company toward an IPO.
“We didn’t take those opportunities because we wanted to make this a very, very large company,” says Stein from DFJ. “People are just starting to get that it could be one of the most important software companies in the last 20 years.”