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'Indie' Startup Ready for an IPO

Craig Matsumoto
7/17/2012

The indie startup is planning to go public.

Gigamon Systems LLC filed an S-1 form with the Securities and Exchange Commission (SEC) Monday, estimating the maximum value of stock sold to be US$100 million.

Gigamon's business is network monitoring -- "visibility and control," as the S-1 phrases it. One thing its equipment can do is make sure traffic gets tapped by the right entities: security elements, management tools and so on.

Quite a few companies are specializing in network monitoring, including: Anue Systems Inc. , which was recently acquired by Ixia (Nasdaq: XXIA); Endance; OnPATH Technologies ; and VSS Monitoring Inc. , to name an arbitrary few. (See SPIT Bits: Now It's Ixia's Turn....)

But in listing its competition, Gigamon's S-1 starts by saying that Ethernet switches can do the tasks its equipment does. So, it lists Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (NYSE: JNPR), and any other switch vendors, as potential competitors.

What makes Gigamon so "indie" is that it was funded by its founders, who consciously avoided any venture capital involvement, as Denny Miu, one of the founders, explained to Light Reading in 2005. At the time, VCs weren't willing to talk about making small investments; the mobile-app craze hadn't hit yet. (See Valley Wonk: The Indie Startup.)

Gigamon did eventually take money, $22.8 million in 2010, from Highland Capital Partners , which owns 33 percent of the company, according to the S-1. Three of the founders -- CEO Ted Ho, CTO Patrick Leong and VP of Engineering Thomas Cheung -- own a combined 31 percent of the shares. (Miu left the company years ago.)

The company, which recorded its first commercial sales in 2005, has even been profitable since at least 2007. For fiscal 2011, which ended Dec. 31, Gigamon reported revenues of $68 million and net income of $10.1 million, or 19 cents per share.

Its first quarter of 2012, which ended March 31, was less rosy: revenues of $16.7 million and a net loss of $857,000, or 2 cents per share.

— Craig Matsumoto, Managing Editor, Light Reading

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Pete Baldwin
Pete Baldwin
12/5/2012 | 5:27:48 PM
re: 'Indie' Startup Ready for an IPO


It looks like none of the outside directors got any stock, which is interesting.


btw, you know who the CFO is who's taking them public? Duston Williams, ex of Infinera.

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