Boston may have more IPOs coming up than you thought

(Map graphic courtesy of
(Map graphic courtesy of

Last week I reported on a dozen Boston tech firms looking to go public in the next few years. Most appear poised to go public in 2015.

But that doesn’t mean Boston won’t be part of the expected tech IPO bonanza this year. Apart from the companies we already know about that are likely to go public in coming months (Wayfair, HubSpot, Imprivata), there are apparently quite a few others lining up.

I spoke with David Westenberg, partner at law firm WilmerHale in Boston and the author of a book on IPOs, who specializes in assisting tech companies preparing to go public. He tells me that WilmerHale is working with nine tech companies in the Boston area that are hoping to go public by August or September. Names weren’t disclosed, but he said the lineup includes companies in the Internet, enterprise software, and health IT spaces.

And that’s just companies WilmerHale is working with — the total number of Boston tech firms looking to go public is almost certainly even higher, Westenberg said.

“I would say that the market is actually very strong for tech IPOs right now, but the pipeline is hidden by the JOBS Act — by confidential submissions,” he said, referring to a legal provision that lets IPO aspirants initially keep financial details from the public eye.

“I think there’s a very large IPO pipeline, and that will start showing up in [public] filings in the next month or two,” Westenberg said.

Online storage firm Box (not a Boston company) made its filing of IPO plans public on Monday, and the offering could serve as a bellwether for this year’s tech IPO market. Last week was seen as the start of a busy tech IPO season, but the withdrawal of Boston-area software firm Globoforce shows that investors are still picking and choosing among IPO contenders. (Kathleen Smith of Renaissance Capital told me it was a sign of possible “cloud exhaustion” among investors, since four cloud-related software firms sought IPOs last week.)

Initial public offerings of stock are a key barometer for the health of the tech and VC industries, with typically tens or hundreds of millions of dollars in funding per IPO flowing into the companies and their private-market funders. That money is often used by the companies to continue growing and hiring, as well as to provide returns to investors (which help ensure a healthy environment for future startup investing).

As for Boston…

Westenberg tells me that all nine of the companies WilmerHale is working with have had what’s called their “organizational meeting,” in which executives meet with the IPO underwriters to figure out a timetable for the offering. “That signals that the company is moving in earnest to an IPO,” he said.

That meeting is followed by a confidential IPO submission with the US Securities and Exchange Commission, a public filing, the “road show” meetings with investors, and the completion of the offering. All in all, it typically takes about four months. The nine Boston tech companies are thus “all looking to [go public] before the traditional August slowdown,” Westenberg said. “Inevitably some will slip over to September.”

If even a portion of those companies do complete their IPOs this year, it’ll be significant for Boston: the region went without a single venture-backed tech IPO for more than a year-and-a-half prior to the IPO in January. (It’s worth noting that the region did have a major tech IPO in 2013 via cloud services firm Endurance International, however).

Not everyone is rushing to the public markets, though. Actifio, a Waltham data management software firm, on Monday announced raising $100 million in funding at a valuation of $1.1 billion, and is now looking to an IPO in mid-2015 at the earliest.

Westenberg said this sort of approach has been common, and part of why there have been so few tech IPOs in Boston.

For successful tech startups, “it’s so easy to raise money privately, that if you don’t want to go public, you don’t need to,” he said, adding that many companies would rather not “put up with the effort and distraction of going public before they have a really good reason to do it.”

Kyle Alspach has worked in journalism in Massachusetts since 2005 and was one of the original staff writers at BetaBoston.
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