Category: IPO Insights & Trends

Quick Take

Sonim Technologies (SONM) has filed to raise gross proceeds of $57.5 million from a U.S. IPO, according to an S-1 registration statement.

The firm provides ultra-rugged mobile communication technologies designed for “task workers physically engaged in their work environments.”

SONM is growing at a much faster rate than the industry and has posted a number of impressive financial metrics.

Company & Technology

San Mateo, California-based Sonim was founded in 1999 as NaviSpin.com to manufacture and market ruggedized Android-based mobile phones and accessories designed for the industrial enterprise and public sectors.

Management is headed by CEO and Director Robert Plaschke, who has been with the firm since 2002 was previously Entrepreneur in Residence at venture capital firm Sutter Hill Ventures.

Sonim’s offerings include rugged mobile phones that can connect to both public and private wireless networks, industrial-grade accessories, as well as cloud-based software and application services.

The company’s technology combines the functionality of single-purpose electronic devices, such as barcode scanners, location-tracking devices and sensors into one Android-powered device with access to apps on the Google Play Store.

Some of the company’s main end consumers are typically in the construction, hospitality, energy and utility, logistics, and manufacturing sectors.

Below is a demonstration video of Sonim’s rugged phone durability:

Source: Sonim

The company has developed and integrated dozens of application programming interfaces [APIs] specific for its phones and has partnered with over 800 app developers to create a purpose-built experience.

Management states that as of January 2019, Sonim was the only private mobile phone company to have a stocked ruggedized product with three of the four largest U.S. wireless carriers – AT&T (NYSE:T), Sprint (NYSE:S), and Verizon (NYSE:VZ).

Investors in Sonim Technologies included B. Riley Financial, Azini Capital Partners, Apax Partners, e.ventures, 3i Group, Accel, and SIAR Capital, among others.

Source: VentureDeal Venture Capital Database

Customer Acquisition

The company primarily markets its products through AT&T, Sprint, and Verizon in the US as well as Bell, Rogers (NYSE:RCI), and Telus Mobility (TL) in Canada.

Sales and marketing expenses as a percentage of revenue have been decreasing as revenue has increased markedly, per the table below:

Sales & Marketing	Expenses vs. Revenue
Period	Percentage
2018	9.01%
2017	12.47%

Sources: Company registration statement and IPO Edge

The sales efficiency rate, defined as how many dollars of additional gross profit are generated by each dollar of sales & marketing spend, was a very strong 2.8x in the most recent year.

Market & Competition

According to a 2017 market research report by Technavio, the global rugged smartphone market is projected to grow at a CAGR of 2% between 2017 and 2021 with a year-over-year increase of 1.92% for 2017.

The number of devices sold annually is projected to grow by 0.68 million units by 2021.

The main factor driving market growth is the growing need for mobile devices that can withstand accidental drops and other extreme conditions.

The North American region is projected to account for half of the rugged smartphone market revenue during the forecast period, as can be seen by the graphic below:

Major director competitors that provide or are developing rugged cellphone or related products include:

Source: Sentieo

The company’s offerings combine multiple single-use device functions into one Android-powered rugged mobile phone that gives the end user many applications to choose from.

Financial Performance

SONM’s recent financial results can be summarized as follows:

• Sharply increased topline revenue and gross profit

• Stable gross margin

• A swing to positive EBITDA and cash flow from operations

Below are relevant financial metrics derived from the firm’s registration statement:

Total Revenue
Period	Total Revenue	% Variance vs. Prior
2018	$135,665,000	129.8%
2017	$59,031,000
Gross Profit (Loss)
Period	Gross Profit (Loss)	% Variance vs. Prior
2018	$48,089,000	136.8%
2017	$20,311,000
Gross Margin
Period	Gross Margin
2018	35.45%
2017	34.41%
EBITDA
Period	EBITDA	EBITDA Margin
2018	$2,031,000	1.5%
2017	-$8,385,000	-14.2%
Cash Flow From Operations
Period	Cash Flow From Operations
2018	$3,861,000
2017	-$8,906,000

Sources: Company registration statement and IPO Edge

As of December 31, 2018, the company had $13 million in cash and $62.2 million in total liabilities.

Free cash flow during the twelve months ended December 31, 2018, was $3.1 million.

IPO Details

SONM intends to raise $57.5 million in gross proceeds from an IPO of its common stock, not including customary underwriter options.

Per the firm’s latest filing, it plans to use the net proceeds from the IPO as follows:

We intend to use the net proceeds of this offering for general corporate purposes, including working capital, expanded sales and marketing activities, increased research and development expenditures and funding our growth strategies. We may use a portion of the net proceeds to prepay principal amounts outstanding and deferred accrued interest under the B. Riley Convertible Note (including a prepayment penalty of up to 2.0% of the outstanding principal amount prepaid, which fee is waived if the total outstanding principal amount following prepayment does not fall below $10.0 million). The B. Riley Convertible Note has an interest rate of 10.0% per year, matures on September 1, 2022, and had an outstanding principal balance, including deferred accrued interest, of $13.0 million as of December 31, 2018.

Management’s presentation of the company roadshow is not currently available.

Listed underwriters of the IPO are Oppenheimer & Co., Lake Street, and National Securities Corporation.

Expected IPO Pricing Date: To be announced.

An enhanced version of this article on my Seeking Alpha Marketplace research service IPO Edge includes my full commentary and opinion on the IPO.

Members of IPO Edge get the latest IPO research, news, and industry analysis. Get started with a free trial!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Ipo Search Results
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(MENAFN – Investor Ideas)
Zoom Initial Public Offering (IPO) (NASDAQ: $ZM) $62.49+26.49 (+73.57%)As of 12:00PM EDT

San Francisco, CA – April 18, 2019 (Investorideas.com Newswire) Zoom Video Communications, Inc. ( NASDAQ: ZM ) announced the pricing of its initial public offering of 20,869,565 shares of Class A common stock at a price to the public of $36.00 per share. 9,911,434 of the shares are being offered by Zoom and 10,958,131 of the shares are being offered by certain selling stockholders. Zoom will not receive any proceeds from the sale of shares by the selling stockholders.

The shares began trading on The Nasdaq Global Select Market under the symbol “ZM” on April 18, 2019, and the offering is expected to close on April 23, 2019, subject to customary closing conditions. In addition, Zoom has granted the underwriters a 30-day option to purchase up to 3,130,435 additional shares of Class A common stock at the initial public offering price less underwriting discounts and commissions.

Morgan Stanley, J.P. Morgan, Goldman Sachs & Co. LLC, and Credit Suisse are acting as lead book-running managers for the offering. BofA Merrill Lynch, RBC Capital Markets, and Wells Fargo Securities are acting as book-running managers, and JMP Securities, KeyBanc Capital Markets, Piper Jaffray, Stifel, and William Blair are co-managers for the offering.

The offering is being made only by means of a prospectus. Copies of the final prospectus, when available, may be obtained from: Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014; J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at 866-803-9204, or by email at ; Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, by telephone at 1-866-471-2526, or by e-mail at ; and Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, Eleven Madison Avenue, 3rd floor, New York, NY 10010, by telephone at (800) 221-1037, or by email at .

A registration statement relating to these securities has been filed with, and declared effective by, the U.S. Securities and Exchange Commission. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Zoom

Zoom helps businesses and organizations bring their teams together in a frictionless environment to get more done. Our easy, reliable cloud platform for video, voice, content sharing, and chat runs across mobile devices, desktops, telephones, and room systems. Zoom is headquartered in San Jose, California.

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MENAFN1804201901420000ID1098410109

Source: Initial Public Offering Search Results
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(MENAFN – Gulf Times) Pinterest Inc’s message to investors was don’t compare us to social media or a search engine. The outcome Wednesday was that it raised about $1.4bn in an above-range initial public offering.
Pinterest operates in a crowded digital marketing space, where Google and Facebook Inc get the lion’s share of ad dollars, and a smattering of smaller platforms like Twitter Inc and Snap Inc get the rest. The San Francisco-based company, which serves as a sort of digital bulletin board for pictures and ideas for furniture, fashion, weddings, recipes and more, has a direct line to millions of people who are looking for specific things to buy. That may give it an edge in making money from its user base compared with some of its peers.
Chief executive officer Ben Silbermann likes to project a more virtuistic, less competitive vision of Pinterest, but investors will still be scrutinising its advertising model. There are a lot of options to place bets on hot technology companies: Ride-hailing company Lyft Inc made its debut this month and Uber Technologies Inc is likely to list its shares in May. Videoconferencing company Zoom Video Communications Inc raised $751mn in its IPO Wednesday and will begin trading Thursday along with Pinterest.
Other high-profile companies considering going public include Slack Technologies Inc, Postmates Inc, Palantir Technologies Inc and Airbnb Inc.
Pinterest sold 75mn shares Wednesday for $19 each, after marketing them for $15 to $17, according to a statement. Based on the number of Class A and B shares outstanding after the offer, as detailed in a regulatory filing, Pinterest’s IPO price would value it at about $10.1bn.
Including restricted stock and options, the IPO values the San Francisco-based company at about $12.7bn, said a person familiar with the matter who asked not to be identified because those details weren’t public. Pinterest’s last valuation, from a private funding round in 2017, was $12.3bn.
The offering was led by Goldman Sachs Group Inc, JPMorgan Chase & Coand Allen & Co Pinterest will trade on the New York Stock Exchange under the symbol PINS.
The listing is the second biggest in the US so far this year, after Lyft’s $2.34bn IPO and ahead of Tradeweb Markets Inc’s $1.24bn offer. Uber will seek to raise about $10bn in an offering valuing it at about $100bn, people familiar with its plans have said.
Zoom, which boosted its share price to $36 from an already elevated range of $33 to $35, is a rare example of a profitable tech startup launching a public listing. The listing values the company at more than $9bn.
Pinterest has taken a slow and steady approach to growth and making money from the service, compared with the faster expansion rates of Facebook, Twitter, and Snap when they went public. Analysts expect revenue will likely come more from squeezing additional ad dollars from the base of users Pinterest already has, rather than growing its total audience.
Despite Pinterest’s efforts to distance itself from the label of a ‘social media company, analysts say it can be a useful benchmark for valuation. According to James Cordwell, an analyst at Atlantic Equities, Pinterest is worth as much as Snap, about $16bn, and could be much more.
‘The ability to monetise that audience is much higher, Cordwell said of Pinterest before the pricing. ‘When you’re at Snap you’re in the business of communicating with friends or wasting time; when you’re going to Pinterest there’s high purchasing intent: you’re planning something, looking for a product. That’s exactly what advertisers are looking for.
Pinterest calls itself a ‘visual discovery platform for people to get ideas for different aspects of their lives, whether that’s curating a wardrobe, planning a vacation or wedding, or furnishing a new home.
It’s not like Google either. Silbermann said Pinterest users often don’t have exact words to describe what they’re searching for. For instance, if someone is looking for inspiration for home design, they may not know what to type into Google, but if they were to see images proposed to them in Pinterest, they’d be able to identify what they liked, and ‘pin’ it to their online board of ideas.
Pinterest said in its IPO filing that it reaches more than 250mn monthly active users, two-thirds of whom are female. That includes 43% of Internet users in the US and 8 out of 10 moms. Pinterest highlights that statistic as an advantage over other platforms, given that mothers are ‘primary decision-makers when it comes to buying products and services for their household.
Ali Mogharabi, an analyst at Morningstar Research, said Pinterest has opportunities to increase its share of the $500bn global digital advertising market.
‘While we don’t expect Pinterest to displace online advertising behemoths Google and Facebook or up-and-coming Amazon, we do expect it to attract a small pinch of digital ad spending, he said. Mogharabi said he expects a 35% compound annual growth rate for Pinterest through 2023, partly driven by the digital advertising market.
In a dig to social media services, Pinterest made it clear in its video to investors that ads are a tax to the user on social media. Even if the item is relevant, people aren’t interested in seeing an ad for a pair of shoes they may have looked at casually a while back when they were trying to talk to their friends.
‘Pinterest should have among the most valuable ad impressions, second only to the Google search ad, said Andrew Lipsman, an analyst at EMarketer.
One of the primary criticisms of Pinterest is that the majority of its user growth is coming from international markets, where the average revenue per user is much lower than in the US In 2018, more than 80% of new users were from outside the US, however, they generated about 25 cents per person compared with $9.04 for those based in the US.
Investors are also aware of the potential threat that Instagram poses. The company just started testing a new shopping feature that allows people to buy things they see directly through the Instagram app.
On the other hand, Pinterest may benefit from the heightened global scrutiny of Facebook, Google’s YouTube and Twitter as those platforms struggle to remove hate speech, violent content and misinformation from their services.
‘Pinterest is one of the few friendly corners of the Internet, he said.

MENAFN1804201900670000ID1098411178

Source: Ipo Search Results
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Source: Initial Public Offering Search Results
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