In fact, Co-Founder Jeff Flowers left Carbonite in 2012 to launch a startup and the other Co-Founder David Friend announced in Feb. As 9 years have passed since Carbonite was founded and 7 years since it received its first major venture round, large and influential shareholders are likely beyond eager to finally get liquidity and return their fund or move on to their next endeavor. CrossLink Capital, Menlo Ventures and the Founders still own ~30% of the Company(3). Without the desired surge in share price that would have led to a follow-on offering (allowing the larger shareholders to monetize their respective holdings), this group has been forced to sell massive stakes on the open market-which has hurt long-term share price performance. The main VCs (CrossLink Capital and Menlo Ventures) further increased their positions after the IPO, buying a combined $20M+ through private and open market transactions. VCs and Founders did not sell any shares in the IPO and still owned more than 50% of the Company after the offering. A relatively "slower growing" company believed to be in a crumbling industry can be a real drag on a stock price, SaaS company or not. Growth rates slowed and margins were squeezed. Nowadays companies like Google ( GOOG) essentially give away consumer backup solutions for free. Though it had strong revenue momentum, the Company really only had one product and the consumer market was quickly commoditized by the competition. Nonetheless, j2 Global still owns 9.5% of the Company as of this writing(3). Carbonite subsequently turned down the offer, citing that it significantly undervalued the prospects of the business. When the price dipped in the summer of 2012, j2 Global (JCOM) came in with an acquisition offer at $10.50/share ( filing), which at the time represented a 38% premium to the day prior closing price. Carbonite IPO'd at $10.00/share and since the first week of trading, investors have never seen a price higher than $16.50/share and shares have been as low as $5.75(2). The Company cut its teeth in the consumer market, and with its low-cost solution quickly attracting subscribers, Carbonite's revenue exploded, growing at a CAGR of 253% from 2006 to its IPO in 2011(1). Carbonite ( NASDAQ: CARB) was founded in 2005 to provide cloud backup solutions with anytime, anywhere access to files stored on its servers.
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