Jive Software Sets IPO Share Price At $8-$10, Valuing Company at $575m   

This is the question that social business software Jive asks. Jive opened its doors in 2001 and produces social networking software for businesses that allows employees to collaborate, discuss, plan, market and support their products and customers. On 24th August this year, Jive filed their S-1, the documents required to start Initial Public Offering (IPO) proceedings. Today they set the price range of the first shares between $8-$10, valuing Jive at over $500m.

Before I start with the numbers, I just want to say a personal note that Jive makes some very impressive software. Jive seems to embody all that is great about social enterprise. I am totally engrossed in the story of the company. I can't wait to see how it develops.

 

 

According to the filing, the company is 36% owned by Sequoia Capital, the venture firm who first loaned a fledgling Google $12.5m in 1999, 14% owned by Kleiner Perkins Caulfield Byers (KPCB) who also joined Sequoia in 1999 loaning $12.5m to Google in '99. Co- founders Matthew Tucker and Bill Lynch each own 14% and CEO Anthony Zingale owns 7%.

The filing also detailed some serious cashflow problems that the business was currently experiencing.

For the financial years (FY) ending Dec 31st, 2008, 2009 and 2010, revenues were $16.9m, $30m and $46.3m, however, the company incurred net losses of $11.3 million, $4.8 million and $27.6 million.

In the 9 months to September 20th, 2011, revenues were $54.8m and losses were $38.1m.

Prior to the IPO plans, Jive snagged $57 million of investment and, in October, Sequoia Capital and Kleiner Perkins invested $40 million more in the company.

Jive said it is reinvesting revenues back into their infrastructure, development, sales and marketing. It wasn't candid about the fact it expects operating expenses to increase significantly. Jive's customer data centers are also undergoing migration from a third-party service provider to a facility managed by Jive themselves, which will require significant funds. It currently employs around 360 people.

The funds raised from the IPO will be used for working capital and to pay outstanding loans totalling $20 million.

 

Is Jive just a dying company looking for a customer?

Absolutely not. The S-1 filing divulges some impressive customers. 635 of them! They include Hewlett-Packard, SAP, T-Mobile and German bank, UBS. Jive currently boasts 15m users.

 

OK! Where do I see Jive in action?

Make a visit to http://www.jivesoftware.com/products/try-jive - you'll need to register, but the showcase video is really worth it. Make sure your speakers are on or your headphones are in!