Starent Prepping for IPO
Several sources have confirmed to Unstrung that the powers that be are prepping the company for an IPO, and that the company’s investors are optimistic it could be one of the industry’s most notable public offerings in 2004. "You'll be surprised when you see the filing," said one very careful and unnamed source.
Founded in August 2000, the vendor has built up an impressive customer base and established itself as the lone startup operating in the GGSN (GPRS Gateway Support Node) and PDSN (Packet Data Serving Node) market, battling against the might of incumbent vendors like Cisco Systems Inc. (Nasdaq: CSCO) (see Starent's Startup Double-Up, Starent Extends Chinese Deal, Starent Wins at Verizon PR, and China Unicom Picks Starent).
Rivals Tahoe Networks and WaterCove Networks have both been acquired, while Megisto Systems Inc. has moved out of the market (see Nokia Sweeps Up Tahoe, Alcatel Swallows WaterCove, and Megisto Breaks Silence).
Starent is today keeping its lips firmly sealed. “Due to Starent’s company policy, we cannot comment on our future financial plans,” writes Gennady Sirota, VP of product management and marketing, in an email note.
Starent did have some REG-D filings with the SEC in 2003, but so far no S-1 document, the preliminary registration form for an IPO. The REG-D filings, which have been requested by Unstrung from the SEC but have not yet arrived in our office, typically contain information for a private placement .
Several experts said that the market is hospitable to the right type of company and that the IPO pipeline is definitely opening up.
Peter Wagner, a VC partner with Accel Partners, says the IPO market is definitely picking up for solid tech companies. (Accel did not invest in Starent.) To launch a "top shelf" offering with the top underwriters, a company requires "about $10 million in quarterly revenue and meaningful profitability," says Wagner. "There's a lot of stuff in the pipeline."
Wagner, who used to be involved with Tahoe Networks, said that there used to be a lot of players in the GGSN routing market and that revenues were hard to come by. But he noted that the crowd has thinned and it's possible Starent is now angling for the majority position in the space. He said he hadn't heard of any specific IPO plans by Starent.
If Starent indeed has the numbers to back it up, it very well could get out the door with good results. To date, Starent has raised a total of $80 million in VC funding. In April, CFO John Delea claimed that no further investment was expected (see VCs Shine on Starent).
Wireless routers (a.k.a. GGSN’s in GSM-derived networks, and PDSN’s in CDMA systems) are packet core network devices. In their next-generation guises, wireless routers add sophisticated service creation, billing, and IP traffic management capabilities to this strategic point in the network.
— R. Justin Springham, Senior Editor, Europe, Unstrung, and R. Scott Raynovich, US Editor, Light Reading