Tech companies continue to gravitate towards an IPO as public markets remain hot. The latest tech shop to file is Bandwidth, which has transformed itself over the years from the owner of Republic Wireless, a mobile virtual network operator, into an operator of APIs for voice, messaging, and emergency services.
While the company hopes to raise $85 million, and touts Alphabet, Microsoft, and other major tech players as customers, it appears the company is going public under less than ideal circumstances.
According to its latest IPO documents, the company “had $41.5 million of outstanding indebtedness under our credit facility, consisting of $39.0 million outstanding under our term loan facility and $2.5 million outstanding under our revolving credit facility.” It is also sitting on a diminishing pile of cash, according to The Triangle Business Journal, with only $5.7 million in the bank as of June 2017.
But not all is woeful for the company. The company has eeked out a profit thus far in 2017, and its revenues derived from its voice and messaging APIs are projected to grow 8 percent from 2016 to 2017 in terms of recurring revenue. And even though it is experiencing steady declines in the “other revenue” category, net revenue continues to appear going up year over year. This implies its effort to be a platform-as-a-service company are fruitful, if slowly realized.
However, will investors be eager to bring to public a company that is awash in debt, low on cash, and doesn’t show signs of explosive growth at this stage of the game? That remains to be seen. In any case, it doesn’t appear that Bandwidth has much of a choice. With markets at all-time highs, it may just be best to commit to now rather than later.
Let go, let god.
From the Crunchbase Daily:
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