Managed Services IPO: Here Comes LogMeIn
Are investors ready to pump money into managed services software companies? We’ll find out this week, when LogMeIn is expected to launch an initial public offering. No doubt, many of LogMeIn’s primary and secondary rivals will be watching the IPO closely. Here’s why.
Many VARs use LogMeIn to remotely access and manage customers’ computers over the Internet. GigaOM, one of my favorite tech news blogs, positions LogMeIn against Citrix GotomyPC and Cisco Systems’ WebEx. But I look at LogMeIn as more of a remote helpdesk tool — thanks to the LogMeIn Rescue tool.
According to GigaOm, LogMeIn wants to raise $107.2 million, and the deal will be priced this coming Tuesday. During the first quarter of 2009, LogMeIn had sales of $17.2 million and a profit of $1.5 million.
“What’s the Valuation?”
For privately held MSP software companies, LogMeIn’s IPO — which could occur as soon as June 30 or July 1 — represents a reality check of sorts. MSP software venture capitalists, CEOs and executives will be watching closely for Wall Street’s reaction, valuation figures and so on. MSPs themselves could benefit, since LogMeIn will generate some financial buzz on Main Street USA, pushing remote managed services closer to mainstream terminology.
This is, of course, a double-edged sword. An IPO is not a finish line or a destination. It’s the starting point for life as a publicly held company. Quarter after quarter, LogMeIn will need to carefully set investor expectations, then try to beat those expectations. That journey apparently will start sometime this week.