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Yet again, a fast-growing tech company has struck gold in the IPO market. The latest is LogMeIn. Priced at $16 per share – and raising about $107 million – the shares have spiked 25% in today's trading (the initial price range was $14 and $16). LogMeIn develops remote-connectivity business applications – primarily for small and medium-sized businesses. Some of the functions include: PC support, file sharing, backups and so on.
There is nothing to download; instead, LogMeIn's applications are web-based. This makes it easier to upgrade the different versions and as well as allow for affordable price points (there is no need for upfront technology costs or expensive consulting services).
Now, a key to LogMeIn's business model is the free versions of its applications. Essentially, this has been a big boost for lead generation. In fact, there are 22.1 million registered users. Of these, about 188,000 are paying members (this is up from 122,000 over the past year).
LogMeIn charges subscription fees, which has created substantial recurring revenues. The annual subscriptions range from $30 to $1,900.
Also, for the first quarter of this year, revenues spiked 73% to $17.2 million (revenues for 2008 came to $51.7 million).
With its IPO proceeds, LogMeIn will continue to invest in lead generation, R&D and even international expansion. Oh, and a chunk of the money will go to a variety of investors like Intel (Nasdaq: INTC), Polaris Venture Partners and Prism VentureWorks.
To learn more about the offering, you can check out the prospectus as the SEC website.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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