VCs Angle for Big Gains in RetailMeNot IPO

Digital coupon provider RetailMeNot filed with U.S. regulators on Monday for an initial public offering of common stock of up to $230 million.

The Austin-based company offers coupons from over 60,000 retailers and brands, accessible through websites, mobile applications, email and social media. It offers discounts for goods including clothing, electronics, beauty products, home and office supplies, travel, food, personal services and business services.

Earnings have been growing briskly. The company, which listed Google, Yahoo and Facebook as rivals, said its annual revenue rose nearly eight fold to $144.7 million between 2010 and 2012. RetailMeNot said it earned net income of $26 million in 2012.

The offering has potential to provide significant returns to venture investors, who own the vast majority of Retailmenot shares. By far the largest stakeholder is Austin Ventures, with a 31.8% stake, followed by Norwest Venture Partners (20.5%), J.P. Morgan (13.7%), Institutional Venture Partners (7%), Adams Street Partners (6.1%) and Google Ventures (5.1%).

The company started out as WhaleShark Media, a startup focused on the online coupon space funded with $87 million from investors including Austin Ventures, Norwest and Adams Street. WhaleShark made a number of acquisitions, including one in 2010 of online coupon provider RetailMeNot, which eventually became the name of the combined company. Between 2010 and 2012, RetailMeNot raised at least $265 million from venture investors, according to Thomson Reuters.

Looking ahead, Retailmenot says it seeks to tap the growth in mobile commerce spending, which research firm IDC estimates represented $63.4 billion globally in 2012 and expects to grow at a 36% compound annual growth rate between 2012 and 2017.

Morgan Stanley, Goldman Sachs and Credit Suisse are acting as lead underwriters, the company said in its filing. RetailMeNot plans to list its common stock on the Nasdaq under the symbol “SALE.”

Photo courtesy of Shutterstock

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