NetSuite, the fraternal twin of SalesForce (both companies CEOs came out of Oracle and have similar business models), is preparing to go public next year based on 2006 revenues of about $70 million. The good news is that this could crack open the IPO window for startups again, which was firmly shut in the wake of GoDaddy’s abrupt withdrawl of its registration statement in August.
Investment bankers are desperate for deals right now as very few companies are going public (and tech IPOs are nonexistent). A source close to the IPO selection process has told us that NetSuite chose Credit Suisse as their banker. And in a surprise move, NetSuite has decided not to syndicate the deal. Usually, IPOs have 2-3 investment banks involved, but NetSuite is going just with Credit Suisse. Our understanding is that the company may have negotiated a lower fee for the IPO than the standard 7%, which is extremey rare.
Oracle’s Larry Ellison owns a majority of the company, and stands to make a significant amount of money in the IPO. But this could also be very good for Silicon Valley, as a number of profitable tech companies grow to the point where an IPO is feasible.
NetSuite has raised over $100 million to date, and is looking to raise another $100 million in the IPO in exchange for 10% of the company.