AppFolio files to go public, looks to raise $100M

Steven Loeb · May 19, 2015 · Short URL:

The property management software company is the latest to file for an IPO this month

After a dull beginning to the year, IPO season is heating up in a big way lately, with three companies announcing their intentions to go public this month.

AppFolio, a property management software solution specifically designed for residential properties, is the latest to file an S-1 with the Securities and Exchange Commission on Monday.

The company says that it plans to raise $100 million, a number that is now becoming a familiar refrain. Seriously, what is with all of the companies saying they want to raise that exact amount of money? The filing did not reveal how many shares the company plans to sell, or their expected price, so that number will no doubt be revised down the line.

The company will list on the Nasdaq exchange under the ticker symbol "APPF." 

Founded in 2006, AppFolio provides cloud-based software solutions for SMBs in the property management and legal industries, covering everything from actual management tasks like online rental applications, tenant screenings, owners portals, and utility billing, to accounting tasks, like online payments from renters, payments to owners, property budgeting, and more.  

"Our platform is designed to be the system of record to automate essential business processes and the system of engagement to enhance business interactions between our customers and their clients and vendors. Our mobile-optimized software solutions have a user-friendly interface across multiple devices, enabling our customers to work at any time and from anywhere," the company said in its filing.

Like many other companies going public these days, AppFolio is not profitable, and it is seeing its loses mount.

In the full year 2014, the company saw $47.7 million in revenue, a increase of 80% year-to-year from $26.5 million in 2013. In the most recent quarter, it saw revenue of $15.8 million, a year-to-year increase of 61% from $9.8 million in the same period the year before.

At the same time, however, loses also rose. In 2014, the company's net loss was $8.6 million, up from $7.3 million in 2013. In the most recent quarter, losses were $3.6 million, up from $1.2 million in the year prior.

The company says this is because of a hiring spree, increasing its employee headcount from 254 employees at the end of 2013 to 377 employees at the end of 2014 and to 430 employees at the end of the most recent quarter. 

The losses are "a result of the substantial increase in headcount, as well as other investments to expand our research and product development, customer service, and sales and marketing, and maintain and expand our technology infrastructure and operational support," the company wrote.

"We have invested, and intend to continue to invest, heavily in our business to capitalize on our market opportunity."

The Santa Barbara-based AppFolio raised only $30 million in venture capital, The last time it raised money was an $8 million round in 2009 from the Investment Group of Santa Barbara. Other investors include Cisco Systems and BV Capital.

AppFolio's upcoming IPO is the latest sign that the market is turning around. 

With 34 IPOs raising $5.4 billion, the first quarter of 2015 turned out to be the least active quarter by IPO count since the first quarter of 2013, and the smallest by proceeds raised since the third quarter of 2011. To compare: the first quarter of 2014 saw 64 deals, and $10.6 billion raised. The only major tech IPO of the first quarter was cloud storage company Box

With GoDaddy and Etsy both going public, along with Fitbit, e-commerce site Shopify also filing, and Mindbody, and now AppFolio, maybe this year won't be so dire after all.

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