Zayo’s IPO, Datalogix, Orion Launch Highlight Last Quarter of ’14
Two of Colorado’s leading tech companies scored big exits during the fourth quarter, with Zayo going public and Datalogix being acquired by Oracle. But those were just two of the biggest stories as 2014 came to an end.
Zayo’s IPO survives a rocky start. Telecom and broadband infrastructure provider Zayo Group (NYSE: ZAYO) has spent the past few years preparing to go public, and it finally did in October, with a $400 million IPO. But while co-founder and CEO Dan Caruso said Zayo “acted like a public company” for years, fate would have it that it picked the worst week in recent years to make the leap, back when the exchanges took a severe dip in October. Concerns that the downturn would make investors gun shy were enough that the idea of delaying the IPO was mentioned.
Zayo did have to substantially change its offering at the last minute and sold its shares at $19, which was below its expected price range. But the company’s stock has done well since then, climbing to above $32 the last week of December before ending the year at $30.57. That gives the Boulder-based company a market cap of more than $7.3 billion.
Oracle pays a whole lot of money for Datalogix. If you asked people in Colorado’s tech community to name the companies poised for big things, Westminster-based Datalogix would be high on the list. The company helps digital publishers and brands like Ford and Kraft plan and track the effectiveness of online marketing campaigns by linking them to in-store purchasers from brick-and-mortar retailers. Datalogix’s database tracked more than $2 trillion worth of consumer purchases from more than 110 million U.S. households.
The company reportedly was testing the waters for an IPO, but ultimately took a different route. Oracle announced in late December it would buy the company for an undisclosed price. Analysts say it could be as much as the high hundreds of millions, although we likely won’t know for sure until Oracle files its next quarterly report with the SEC.
Heavy hitters get ready for stretch run. By now, it’s not uncommon to read about Colorado tech companies closing major funding rounds. But in the past three months, three of the leading companies announced late-stage or growth equity rounds that establish them as IPO candidates, maybe not next year but not too far down the road.
SolidFire closed the biggest round, raising an $82 million Series D round. It brings the total raised by the Boulder-based data storage company to $150 million. SolidFire makes all-flash storage systems for enterprise customers and cloud-service providers. Customers include eBay and Century Link.
Founder and CEO David Wright said the round gives SolidFire “control of our own destiny,” as the company tries to scale up and fend off competitors for market share. “We can then look towards the public market when it makes sense for us, our customers, and our investors.”
Sympoz, dba Craftsy, raised a $50 million Series D round. Craftsy produces online instructional videos for people who want to learn arts and crafts. Subjects include photography, quilting, and baking.
The round is for “strategic growth” and brings the total raised by the Denver company to nearly $106 million. Co-founder and CEO John Levisay said the company believes it has an addressable market of $100 billion. Its business model is to sell the videos to a customer base that’s primarily female, and it also partners with companies such as Jo-Ann Fabric to sell supplies.
Compared to SolidFire and Craftsy, Welltok raised a mere $25 million growth equity round, although the company said it does plan to raise an additional $12 million when the round closes. Welltok, which is headquartered in Denver, is developing software that creates personalized health plans for users and integrates information from devices like activity trackers.
What makes Welltok’s round impressive is how much money it has raised in the past two years. In April 2013, it raised $18.7 million, and in February it raised $22 million. That brings its total to $75 million, with investors including Bessemer Venture Partners and New Enterprise Associates.
Welltok CEO Jeff Margolis said the round allows the company to enter 2015 with “no distractions” as it tries to seize an opening as the $2.7 trillion healthcare industry devotes more attention (and money) to keeping people healthy and out of doctors’ offices and hospitals.
Nest buys Revolv. Revolv, a Boulder-based startup and Techstars alum, had a big idea. Revolv was making a smart hub that could control automated locks, lights, speakers, and other “smart home” devices. Its founders said the hub would be able to control 95 percent of home automation devices.
But we’ll never know whether Revolv’s idea would have worked, as Nest bought the company in October for an undisclosed price. Nest, which makes smart thermostats and smoke detectors, was itself bought by Google for $3.2 billion earlier this year.
The deal appears to be a classic “acqui-hire.” Nest executives praised Revolv’s management and engineers as some of the best in the business but immediately discontinued selling Nest’s smart hubs. The Revolv team will remain in Boulder, where they will lead the “Works with Nest” program to expand the ecosystem of products that are compatible with Nest.
Orion lifts off. NASA topped the headlines around the world in early December with the first test flight of the Orion space capsule, which could be the first step in a long march that ends on the Moon or Mars. The four-and-a-half hour unmanned mission was considered a success and is a milestone for the $11 billion program.
Not as prominent was the story’s Colorado angle. Lockheed Martin Space Systems, which is located south of Denver, designed and built the vehicle. The United Launch Alliance, a partnership of Lockheed Martin and Boeing headquartered outside Denver, built the Delta IV Heavy rocket used in the launch.
That connection means that while the mission was one small step towards Mars, it felt like a giant leap for Colorado’s space industry.