China's Alibaba Projected to Lead IT IPOs in 2014
"There's not really a [huge] U.S. IPO, like a Facebook or Twitter, on the horizon that we're aware of," Kline of Goodwin Procter said. "There are a lot of companies that are really solid, with significant revenue and great growth rates that will be attractive investment opportunities." Kline, bound by nondisclosure agreements, wasn't able to name company names at this time, but as they become publicly available, eWEEK will be reporting on them. 2014 isn't anything like the macro-environment 15 years ago, when the Internet was new and there was lots of venture capital money being invested in companies that might have had good ideas but really no viable business model, Kline said. "Those companies [well-known examples were Pets.com, Webvan.com and a number of others] really had no right to be public companies; they had no financial model to support themselves and weren't mature enough," Kline said."I haven't seen many of those offerings," he said. "Most IPOs that are brought to market are solid companies; if they're not profitable, they have significant growth rates or a short-term path to profitability." Enterprise software companies—namely in storage, cloud middleware, social networking, sensors, big data analytics and user interfaces—appear to be among the favorites for going public this year. The fact that the capital market's windows were closed for a few years has meant that there are now more mature companies that are ready to go public, Kline said. "When you combine that with the fact that the Internet infrastructure is now ready for business [thanks to widespread broadband connectivity, improved networking equipment, and better servers and software], with everything moving to the cloud and the SaaS [software-as-a-service] business model, there are a lot of new companies with interesting, predictable revenue models that are exciting for investors, and investors are paying for those companies," Kline said.
Good Number of Solid Companies Will Surface