IPO Coming for Coupon Site RetailMeNot
Claiming to be the world's largest digital coupon marketplace, RetailMeNot Inc. has filed for an initial public offering (IPO) and set an offering price range of $20 to $22 a share. The firm expects to sell just over 9 million shares, half offered by the company and the other half by selling shareholders. Underwriters have been granted an overallotment option of 1.36 million shares.
RetailMeNot says it operates the largest digital coupon websites in the United States and the United Kingdom, and that it had contracts with more than 10,000 retailers at the end of 2012. Some 60,000 retailers and brands offered digital coupons through the websites in 2012. Most of the company's business comes through agreements with performance marketing firms, not directly from retailers. In 2012 the company's revenues totaled $144.7 million, up from $16.9 in 2010.
When explaining the competitive landscape the firm operates in, RetailMeNot notes that the market for digital coupon "solutions" is highly competitive, but does not name as a competitor the most recognizable brand in the sector, Groupon Inc. (NASDAQ: GRPN). Instead, the company names "potential competitors" as Google Inc. (NASDAQ: GOOG), Yahoo! Inc. (NASDAQ: YHOO), Microsoft Corp.'s (NASDAQ: MSFT) Bing search engine and Facebook Inc. (NASDAQ: FB). Should that potential develop into real competition, RetailMeNot could be in serious trouble down the road.
RetailMeNot expects to use $52.5 million of the proceeds from the IPO to pay unpaid dividends and $6.6 million to repay notes that mature on August 31. The firm expects to use the balance of its share of the proceeds for working capital and other general corporate purposes, and in its filing says it will invest the remaining proceeds in short-term, interest-bearing, investment-grade securities.
This IPO may be a bellwether for the social media sector. If the IPO goes out below the range — or is cancelled — the result could well be a chilling effect on both funding and IPO prospects for other privately held social media companies. If the IPO goes out in or above its projected range, more offerings could be coming soon.
RetailMeNot has applied to trade on the Nasdaq under the ticker symbol SALE.
Filed under: Social Media Tagged: FB, GOOG, GRPN, MSFT, YHOO