Varolii Shelves IPO: Seattle Software Maker Founded by MIT Grads Has Boston Operations… and Shareholders

Seattle software maker Varolii, which makes tools that help businesses communicate over multiple channels—voice, SMS, Web, fax, pager, e-mail—said on Friday it would not proceed with its IPO plans “due to the difficult market conditions for initial public offerings.”

The offering, which was expected to raise up to $86 million, affects both Seattle and the Boston area, home to Varolii’s Business Continuity Division (formed from EnvoyWorldWide, which Varolii bought in December 2005). Varolii was founded in 2000 by MIT grads Scott Sikora and Michael Ho as AlertOnline. It was later renamed PAR3 Communications, and the moniker was changed again last year to Varolii (chosen to reflect the Pons Varolii, a neural pathway in the brain, and no doubt make you think management is smart). The company claimed $68 million in revenues in 2007.

Investors, as the Seattle Post-Intelligencer‘s John Cook pointed out, include BlueRun Ventures, Draper Fisher Jurvetson and InterWest Partners. All are California-based. But the IPO cancellation is also a setback for Boston-area venture firm Longworth Venture Partners. Longworth was an investor in EnvoyWorldWide. As Longworth partner Jim Savage blogged last year, “We are very pleased to announce that Varolii has filed for its IPO…Varolii acquired Envoy and we received Varolii stock.”

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