Utterly Biased Beta Newsletter

 

The end of IPO limbo?

Snap Inc., set the price for its expected IPO this week — with a valuation in the range of $18 billion to $20 billion — and judging by how ALL the angles of it are being covered by media outlets from Variety to USA Today to the usual suspects like Fortune, ReCode, and TechCrunch, it is clear that everyone is fired up for a return to the days of yore when the companies everyone expected to go public actually did hit the NYSE and Nasdaq.

Since 2014, when Wayfair, HubSpot, and CyberArk locally, and Alibaba, among others, went public, there have been few IPOs, save for outliers like Rapid7, Acacia Communications, and Everbridge. Most of these have seen a rise in their initial stock price since going public. But the state of the market has left others weary of leaving the private market for the much more unstable public one.

Back in 2014, I remember clearly sitting across a far-too-large conference table with Tom Erickson, Acquia’s CEO. Erickson was fired up, we were at Acquia’s first major conference, taking place in Boston, and he was excited for 2015. Acquia had set its sights on an IPO, which Erickson felt was an inevitability, so much so that he had pushed hard for the company to join HubSpot and Wayfair in the late 2014 IPO surge.

A few years later, that still hasn’t happened.

Companies like Veracode, Acquia, Actifio, and Carbon Black (formerly Bit9) might feel compelled to join the IPO party again after sitting in the wings for years.Jeff Fagnan of Accomplice may have two portfolio companies go public if the window reopens. Veracode and Carbon Black, both under S-1s, and both have been mentioned as IPO candidates since 2014, When I asked him about missing an opportunity before, he acknowledge that, “Yes, it was probably a missed window.” But he added that, “Going public is just a stop and not the final destination though.”

That “stop” is a big one, however, and, as seen by the growth of all the companies that have gone public since 2014, having a successful public company can impact the entire market.

So let’s dust off the NYSE badges and get ready for some long awaited IPOs here in Boston post-Snap. They’ve been a long time coming.

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Who is under-the-radar?

Speaking of Fagnan, I asked who in Accomplice’s portfolio was not getting the attention they should be. His answer, Hopper.

As he explained, Hopper is, “Absolutely on fire and will be one of the biggest consumer companies in Boston.”

Why does he feel that way? He told me that it’s the #2 downloaded travel app in the US with approximately 1 million downloads per month (half of them organic), that they have sold almost 100,000 airline tickets last month, and that Hopper will be adding three times as many people in Boston this year.

But Hopper is a known entity around here, already having raised $60 million.

So for a real under-the-radar company, let’s turn to Sarah Downey, Fagnan’s partner at Accomplice.

The company she likes in the portfolio? Acoustic sensor company Vesper.

“They are one of the most stealth companies in Boston, yet doing some of the craziest shit I’ve ever seen. The lab equipment in [at Vesper] alone is wild,” she said.

(If you know of a VC portfolio company that should be getting more attention, shoot a note to tips@utterlybiased.com)

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What went down this week…

The One – The big news in Boston this week is Katie Rae taking over MIT’s The Engine fund (great profile from Scott Kirsner here). There has been almost universal praise for this move — truly, everyone I spoke with believes it is a win for Rae and a win for MIT. With the addition of Rae, MIT gains something it has been quite lacking for some time: A well-known and beloved figure with outstanding venture and accelerator chops, who excels at motivating and evangelizing for startups. For far-too-long, MIT’s quiet technological dominance has been overshadowed by Stanford’s more, shall we say “marketable” entities. This will help change that. The VCs, operators, and Techstars alums and mentors I spoke with raved about Rae. However there were one or two voices in the wilderness who wondered about Rae’s experience with the type of “tough tech” mentioned in The Engine’s announcements for this move. So I reached out to Katie, and here is what she said:

  • “The good news is that I will not be the only person at The Engine. I will build a team with deep understanding in specific areas of technology that we find interesting. At the heart of The Engine, we are investing into and helping entrepreneurs and there is lots of overlap no matter what area of technology you decide to tackle. People may not realize that as an investor at Techstars and Project 11 I have had a soft spot for tough tech as shown by investments in companies such as Neurala, NBD Nano, and Sandymount Technologies. I have lots to learn and an incredible network to help me learn faster.” Sounds like she’s ready for the mission.

C-Suite – As a bunch of outlets reported on Thursday, Dyn CEO Colin Doherty is taking the chief executive role at Cambridge-based Fuze, the cloud-based communications company that started life as Thinking Phones.

  • The coverage of this has been that Fuze is adding Doherty in anticipation of an IPO. Doherty (taking over from Steve Kokinos who is joining the board) JUST stepped in for Jeremy Hitchcock at Dyn and within a month had closed a sale to Oracle. While this is being sold as a final pre-IPO move, Doherty’s stints prior to Dyn include Arbor Networks (Acquired by NetScout in 2015), BTI Systems (Acquired by Juniper Systems in 2016), and Mangrove Systems (acquired by Carrier Access Corp. in 2007). That’s four acquisitions with a one sale per year streak for the past three years, which is quite impressive. There are all sorts of different types of CEOs, and Doherty seems like an “acquisition CEO” not an “IPO CEO.” That could change, and many folks I spoke with really expect an IPO, but I forsee Doherty’s acquisition streak staying alive in 2017.

$2.5 Million – That’s the funding number for Dave Balter’s Mylestone, which dropped the “d” from Mylestone(d) and made a shift in its product. The new investment was led by True Ventures, with involvement from initial backers Founder Collective, Boston Seed Capital, and Converge VP.

  • There are two ways to look at this news of Mylestone making another pivot, this time from a post-death digital remembrance product to an AI-powered digital memory application accessed through Amazon’s Alexa via voice command. One could say that its a bad sign that the company is making another drastic change in what it does, which is by my count the third such pivot. Or, this can be viewed as Balter and company taking all they’ve learned from their Mylestoned experiences to bring a complete vision of the original thesis behind the company to life. I bet on the latter. From what I’ve heard, the Mylestone team has been heads down and hard at work on this product for months. The Mylestone team are deadly serious about this new iteration, although Balter’s recent Startup Grind post might hint otherwise.

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No names, just stories

There are plenty of local stories that don’t get talked about much, but should find the light of day.

First, many of the major so-called “secrets” of Boston tech aren’t very salacious. (At least the majority of them are not; we won’t dig into the nonsense people have done foolishly intermingling their personal and business lives, a good mirror does work enough.)

Second, there are some damn entertaining stories out there that feature the larger-than-life characters who helped build Boston into one of the world’s first hubs for technology as well as those developing the next generation of innovative companies.

We’ll be starting this feature next week, but, in the interim, send any good tales you have to shhh@utterlybiased.com.

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