Dismal Markets Mean Inrix, nLight Aren’t Rushing to IPO
Ah, the good old days of April. Spring was in the air, and bankers were running the numbers on IPOs for Northwest technology companies. It was fun while it lasted.
Here’s the flashback: Real-estate website Zillow filed its paperwork on April 18, and RFID maker Impinj followed suit three days later. I even interviewed Seattle-area investors and entrepreneurs about whether these were the first ripples of a new boom for local tech companies.
So much for all of that.
Zillow (NASDAQ: Z) did successfully go public, opening trading on July 20. But Impinj has moved slower, not updating its SEC filings since mid-July. And some other Washington state companies that say they have the fundamentals to go public are staying away until the markets improve.
Exhibit A is Inrix, the Kirkland-based provider of traffic data that started as a spinout from Microsoft. Back in late July, Inrix reported a new $37 million financing round, and CEO Bryan Mistele told me that the company was ready to go public “sooner rather than later,” and was doing better than Zillow when it filed.
That was just five days after Zillow started trading, and two weeks before S&P’s downgrade of the federal government sent the stock markets into a tailspin. These days, Inrix is taking a wait-and-see approach, spokesman Jim Bak says.
“Was it in he cards this year? Yes. Are we choosing to play the hand? No,” Bak says.
He points out that Inrix is having another good year—it’s a profitable, cash-flow-positive company that doesn’t need an IPO to sustain its business. So that makes the decision to wait and see even easier.
“We’ll probably have another year under our belt of 100 percent year-over-year cumulative annual revenue growth,” Bak says. “Everything is in place. The numbers are there, the growth curve is there … but the climate really isn’t ready.”
Vancouver, WA-based nLight Photonics, which makes semiconductor lasers, also has been talking up its IPO potential this year. In a series of news reports tied to its $17.5 million financing round in late August, company officials and investors said nLight was poised for an IPO—although they generally declined to put a timeline on taking that step.
But it definitely doesn’t sound like the step will come anytime soon. “When volatility is how we’ve seen, it’s not a good time to go public,” CEO Scott Keeney says.
In the meantime, nLight is profitable and growing 30-40 percent a year, Keeney says.
“It’s hard to speculate on how the current market changes the exact timing of how we’re thinking about the big step,” Keeney says. “I can say we are a fast-growing, strong venture-funded company, and that’s clearly in our plans.”
Impinj couldn’t comment on the timing and particulars of its IPO filing because it’s in the middle of the registration process, but said a public debut is still in its future.
“While the recent volatility in the capital markets has impacted many IPOs, we have no current intention of withdrawing our registration statement,” spokesman Jim Donaldson says. “The timing of Impinj’s IPO by will depend on many factors, including conditions in the capital markets, conditions in the markets for our products, and our financial performance.”