Bazaarvoice raises $114m

Bazaarvoice (Austin, Tx. USA) burst through the IPO gate Thursday night, selling its shares above its expected price range.

The software maker raised $114 million in the initial public offering, according to Reuters News Service, which cited an underwriter.

Reuters said the shares went for $12 each, which was well above the expected range of $8 to $10.

Bazaarvoice filed for an IPO in August, amid a stock market downturn and at a time when few companies were issuing initial public offerings. But six months later, the market has bounced back, and the IPO window reopened.

Founded in 2005, Bazaarvoice sells cloud-based software that lets companies add ratings and reviews to their websites. Its platform lets companies manage social media by analyzing content from online reviews, YouTube, Twitter and Facebook.

It is similar in concept to the European based Trustpilot (Copenhagen, Denmark). Customer reviews are the core of the Trustpilot concept. Every review helps consumers make more informed and safer decisions when shopping online.

Anyone can write a review on Trustpilot, and all reviews are openly available to the public. Companies can benefit greatly from both positive and negative reviews; positive reviews will help build credibility and popularity, while negative reviews will help companies become aware of aspects that can be optimized in order to achieve a higher level of customer satisfaction.

Bazaarvoice has more than 580 active clients, including Costco Wholesale Corp., Best Buy Co., Home Depot Inc. and Crate & Barrel, according to the company’s securities filing and website.

The timing of the IPO couldn’t have been better, said Scott Sweet, senior managing partner of IPO Boutique, which tracks the IPO market.

“What’s giving them momentum is the fact that the last three IPOs in the cloud computing space — Guidewire, Greenway and Brightcove — have done exceedingly well,” Sweet said. “Also, Bazaarvoice’s product is sound, their client base is highly impressive, and the top line growth is good.”

Bazaarvoice’s revenue increased 65 percent to $75 million in the nine months that ended Jan. 31, compared with the same period a year earlier.

The company has never been profitable, and its net loss during the nine-month period widened to $17.5 million from $15 million during the same period of 2010.

“Their numbers are certainly not good on the bottom line, but they have a grace period right now,” Sweet said. “They won’t be given years; they’ll be given quarters to show profitability.”

Bazaarvoice has 780 employees, according to Renaissance Capital.

Its major shareholders include Austin Ventures, with a 34.1 percent pre-IPO stake; Battery Ventures, with 14.3 percent; and Eastern Advisors with 10.6 percent.

Morgan Stanley, Deutsche Bank Securities and Credit Suisse were the underwriters.

This is Austin’s first IPO of the year, and follows three offerings by Central Texas companies last year.

Source: Statesman