Trulia sets IPO price at $14-$16, raising nearly $100M

Real estate site offering six million shares in public offering

A little over a year ago, real estate marketplace Zillow set its IPO price at $20, then saw its stock triple to $60 right out of the gate, and then fall back to end the day at $35.77, still a nice bump up from its debut price.  Today, Zillow trades at $42.63, suggesting the public market may be receptive to new real-estate offerings, like Trulia.

Trulia has priced its shares at $14 to $16 a share, it said in a document filed with the Securities and Exchange Commission earlier this week.

The company is offering six million shares to be registered, which would allow it to raise $94 million. In the event that the company sells upwards of six million shares, Trulia’s underwriters have the option of purchasing another 900,000 shares at the IPO price, minus an underwriter discount.  This option can be exercised within 30 days of the IPO.

Those underwriters are JPMorgan Chase, Deutsche Bank, RBC Capital Markets, Needham & Company, and William Blair & Company.

Trulia says that it expects to sell its stock at $15 a share, and estimated proceeds of $65.8 million.

“We estimate that the net proceeds from the sale of shares of our common stock that we are selling in this offering will be approximately $65.8 million (or approximately $78.3 million if the underwriters’ option to purchase additional shares in this offering is exercised in full), based upon an assumed initial public offering price of $15.00 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us,” it says in the SEC document.

The stock will be listed under the tickets TRLA.

Pete Flint and Sami Inkinen founded the real estate site, which provides tools and information for homebuyers, in 2006. The company has raised over $33 million, including raising a $10 million Series C in 2007, led by Sequoia Capital, as well as previous investors Accel Partners and Fayez Sarofim & Co., and raising a $15 million Series D in 2008, from Sequoia Capital and Accel Partners.

In June, Trulia had 22 million unique monthly visitors, which is up from five million in June 2009.  Additionally, subscribers have increased to 21,544 from some 2,400 in 2009.

The company has seen its revenue double every year since 2009.  In 2011, the company saw revenues of $38.5 million, up 49% from $19.8 million in 2010.  In the just the first half of 2012 alone, Trulia already generated $29 million in revenue. 

While revenue increases, so do the company’s net losses. In 2009, Trulia posted a net loss of $7 million. That number went down to $3.8 million in 2010, but rose again to $6.1 million in 2011.  Between January and June 2012, Trulia already posted a net loss of $7.6 million. 

Most of the company’s spending comes from sales and marketing, which accounted for $17.7 of spending in 2011. Technology and development is another area of heavy spending, which Trulia spending $14.6 million on it last year. These two areas alone accounted for $32.3 million of Trulia’s $38.5 million 2011 revenue. It’s not hard to see how it ended up in the red with numbers like that. 

(Image source: jackconway.com)