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Reply.com Raises $15 Million More—But IPO Is Still On
Online lead generator Reply.com, which filed for a $60 million IPO earlier this year, has raised $15 million in new funding from Hercules Technology Growth Capital. A spokeswoman says the funding is “independent of the IPO plans” and, indeed, the company hasn’t withdrawn its registration statement with the SEC.
The cash influx, however, likely means Reply.com won’t be going public soon—no big surprise considering the shaky market. The company had said it would use the proceeds from its IPO in part to fund $2 million in capital expenditures and also repay $1.6 million in debt, and the new round gives the company plenty of cash to easily do both without having to go public right away. As of Dec. 31, Reply.com only had $1.3 million in cash.
Hercules Technology Growth Capital listed its investment in Reply.com in announcing $111 million in “new commitments;” Venturebeat first noted that Reply.com was included.
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Posted In: Advertising, Money, IPO, M&A & Venture Capital, Venture Capital, reply.com
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Online Lead Marketplace Reply Files For $60 Million IPO
Online lead generator Reply wants to raise $60 million in an IPO, according to an SEC filing. The startup runs an auction-based online marketplace that lets companies buy information about people who have indicated an interest online in buying a certain product; advertisers can target their lead spending based on a number of categories, including where potential customers live and what exactly they are interested in. Reply says that most of its clients are in the automotive and real estate industries.
Reply joins a growing list of digital firms hoping to go public. This year alone, GameFly, Vringo, Everyday Health, Motricity, and Lulu have all notified the SEC that they intend to sell shares. So far, the track record of companies that have gone beyond that point is poor. QuinStreet (NSDQ: QNST) went public but had to cut the size of its offering, while Friendfinder Networks cancelled its IPO altogether, citing “market conditions.”
Reply had raised at least $27.5 million in venture funding, including $4.5 million in a third round from ATEL Ventures in October 2007. Some highlights from the filing:
—Financial performance: The company generated $34.3 million in revenue last year, up from $23.3 million in 2008. It also posted $2.5 million in net income, compared to a loss of $3.245 million a year ago. It was its first ever reported profit.
—Ownership: The filing lists CEO Payam Zamani as the primary shareholder with 43.1 percent of the stock; other shareholders include Scale Venture Partners (21.5 percent) and Outlook Ventures (6 percent).
—Use of funds: Reply says it will use the proceeds of the offering to pay down its debt, fund capital expenditures, and for general corporate purposes. The company says in its filing that it’s also interested in pursuing acquisitions that “enable us to increase our geographic presence, expand our advertiser relationships, expand into additional industry categories and further enhance our marketplace.” Right now, the company only has $1.3 million in “cash and cash equivalents.”
—Stock: Reply wants to trade on the Nasdaq under the symbol RPLY. Underwriters include Jefferies & Co., Piper Jaffray & Co., Needham & Co., and ThinkEquity.
