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RCS and VoLTE system specialist looks to raise about $86M from NYSE listing, with strategic M&A part of its potential use of funds.

Mavenir Files for IPO

Ray Le Maistre
10/7/2013
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Mobile data service platform specialist Mavenir has filed for an IPO valued at just more than $86 million, according to documents filed with the SEC.

Mavenir has developed products, specifically its mOne Convergence Platform, that enable mobile operators to deliver a range of data services across 2G, 3G, and 4G networks, including RCS (Rich Communication Services) and voice-over-LTE (VoLTE). It is also one of the industry vendors taking advantage of the shift towards network functions virtualization (NFV). (See Mavenir Offers Virtual Mobile Core, Mavenir Supports RCS for MetroPCS, and Radisys, Mavenir Partner on 4G Voice in Europe & the US.)

Its focus on helping service providers develop new services has enabled it to build a mobile operator customer base of more than 120. Mavenir's customers include AT&T Inc. (NYSE: T), Deutsche Telekom AG (NYSE: DT) , T-Mobile US Inc. (including MetroPCS), Telstra Corp. Ltd. (ASX: TLS; NZK: TLS), and Vodafone Group plc (NYSE: VOD), and it is the company providing the underlying technology for MetroPCS's RCS and VoLTE rollout. (See MetroPCS Puts Comms Startups on Notice.)

That customer base and the growth in demand for mobile data services platforms has helped Mavenir increase its revenues to nearly $74 million in 2012, when it reported an operating loss of $14.6 million.

According to its filing, the company generated revenues of $48.2 million during the first six months of 2013, up more than 20 percent compared with the same period a year earlier, while it reduced its operating loss to $2.6 million for the first half of this year from $4.5 million a year earlier.

Funds for expansion
The company was founded eight years ago and quickly raised venture funding: It has raised more than $100 million in funding since its inception. The CEO, Pardeep Kohli, has been with the company since 2006, when Mavenir had about 50 or so staff. But its potential was obvious -- Light Reading identified it as the industry's most promising startup in that year -- and the company now has 670 staff. (See Mavenir Converges on $13M, Mavenir Names CEO, and Top Ten New Startups.)

Now the company wants to raise money to further expand its business, including its customer base, as while it has sold its technology to many operators, about 55 percent of its revenues in the first half of 2013 came from just four customers (T-Mobile USA, Vodafone, AT&T, and Deutsche Telekom).

In its filing, the company notes that it may use some of its IPO proceeds for targeted acquisitions, something it has done previously. (See Mavenir Bags $40M, Buys Airwide.)

Mavenir also intends to market its products beyond the mobile operator market, with plans to target fixed-line operators and large enterprises that run IP networks.

Of course, helping service providers with their mobile data service creation strategies is something every self-respecting IP systems vendor is looking to do, so Mavenir isn't short of competition. In addition to the main equipment vendors such as Alcatel-Lucent, Ericsson AB, Huawei Technologies Co. Ltd., and Nokia Solutions and Networks (NSN), the company also counts Oracle Corp. (courtesy of its Acme Packet acquisition), BroadSoft Inc. , Comverse Inc., Metaswitch Networks , and Sonus Networks Inc. (Nasdaq: SONS) amongst its fiercest rivals.

— Ray Le Maistre, Editor-in-Chief, Light Reading

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DanJones
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DanJones,
User Rank: Blogger
10/7/2013 | 11:39:31 AM
One to watch
This should be an interesting test case for other networking infrastructure & software startups -- like, say, Affirmed Networks, to watch.
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