Airline Wi-Fi provider Gogo files for $100M IPO

Krystal Peak · December 23, 2011 · Short URL:

Gogo becomes second airline Wi-Fi company to file for public offering in 2011


Just as Christmas travelers are piling onto planes to get home for the holidays, the in-flight Wi-Fi provider, Gogo, has filed for a $100 million IPO.

Since its 2008 launch, Gogo has raised more than $500 million in funding to bring Internet connectivity to  airlines such as American Airlines, Virgin America, Delta Air Line, Alaska Airlines and US Airways.

In just four short years, the Wi-Fi company to the airways has entered nearly 1,200 planes (approximately 85% of the internet functional aircrafts in Northern America.)

Gogo stated in its filing that it had $36.8 million in 2009 revenue, $94.7 million in 2010 revenue and $113.8 million for revenue for the first nine months of 2011. 

Like many companies going public in the tech sector, Gogo has taken a loss for the past three years, with $140 million in losses in 2010 -- a number which drastically dropped in 2011 to $26 million for the first nine months of 2011.

Gogo is also in a trial agreement with United Airlines and Air Canada and is in various stages of contracts to add wi-fi to another 525 planes.  

Gogo is a fairly well-known brand name for those that find themselves in U.S. airports throughout the year --but the company says it makes less than half its profits from enabling airplanes with Internet. The remainder of Gogo’s revenue comes from its sales of satellite or broadband equipment to private plane companies such as NetJets and Gulfstream.

Morgan Stanley, J.P. Morgan, UBS, Allen & Co., Evercore Partners and William Blair are the bankers for the IPO. Investment firm Ripplewood Holdings owns roughly 38% of Gogo’s stock, according to the IPO filing.

Earlier this year, Gogo announced that it had interest in going beyond in-flight connectivity to providing a full multimedia platform for airlines for news, movies, and shopping deals.

Fellow wi-fi provider Boingo filed for an IPO earlier this year and went public in May but has had shaky reception and is trading at just over half of its debut price of $14 a share (NASDAQ: WIFI.)

Early this summer, Chief Executive of Boingo, Dave Hagan, said he believed that within five years, every fast-food restaurant, stadium and mall will have Wi-Fi access and mobile companies such as his would be a big player in that growth.

Boingo has its growth set on expanding the number of locations it offers Wi-Fi from airports and plane to other high traffic areas. Hagan said the Wi-Fi accessability business is at the beginning of a five-to-10-year upward trend.

In coming months, industry experts will be able to scrutinize if Gogo will be able to fair better in the public stock exchange than its competition Boingo has this year.


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