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2013: More IPOs for Enterprise Social Operators

Helping businesses collaborate better is a trend to watch


Adobe (NASDAQ:ADBE) yesterday purchased startup Behance, a social network for creative professionals. The site, which Adobe bought for an undisclosed sum, has roughly 1 million members who use it to showcase their portfolios and get new gigs.

And yes, the acquisition points to a big trend in enterprise software — that is, the technology is getting more social.

5 IPOs to Watch For in 2013
5 IPOs to Watch For in 2013

It should be no surprise. After all, corporations can certainly benefit from better collaboration and sharing, whether with employees or partners. No doubt, the social techniques from consumer operators like Facebook (NASDAQ:FB) and Twitter can be a big help.

One company that has been aggressive with this trend is (NYSE:CRM), which has been getting lots of traction with its Chatter. But this is really an exception. The fact is it’s not easy to develop social platforms for business applications.

So, to remain competitive, traditional tech companies have been pulling off acquisitions. For example, Microsoft (NASDAQ:MSFT) recently shelled out $1.2 billion for Yammer, a leader in social enterprise software. Another notable deal came from VMware (NYSE:VMW), which purchased Socialcast.

OK, so going into 2013, might we see some continued dealmaking and perhaps even some IPOs? Definitely. Interesting enough, there was one new offering this year, from Jive (NASDAQ:JIVE). Often referred to as the “Facebook of the enterprise,” Jive has mega-clients like Verizon (NYSE:VZ), Sony (NYSE:SNE) and Allstate (NYSE:ALL). In the latest quarter, its revenues grew at a 39% rate.

But there have also been a variety of IPOs for companies that help manage social media for businesses. Some include Bazaarvoice (NASDAQ:BV), ExactTarget (NYSE:ET) and Eloqua (NASDAQ:ELOQ), which this week agreed to a buyout from Oracle (NASDAQ:ORCL).

What might be some of the IPO candidates for next year? Let’s take a look at three possibilities:

Atlassian: It develops software that helps companies collaborate on info-tech projects. From 2007 to 2012, revenues have gone from $17 million to over $100 million. It has roughly 23,000 customers.

A unique aspect of Atlassian is that it doesn’t have a salesforce. Instead, it uses a “freemium” model that makes it easy for customers to try out the software for free and then upgrade to a paid version.

To prep for its IPO, Atlassian recently added senior people to its board. They include the former chairman of SuccessFactor, Doug Burgum; Adobe’s former CFO, Murry Demo; and Accel’s Kirk Bowman.

Box: It’s a leader in cloud-based collaboration (I mentioned the company in a recent piece for the IPO Playbook).

As a sign of its technology’s prowess, Box has snagged customers like Proctor & Gamble (NYSE:PG), Intel’s (NASDAQ:INTC) McAfee and AAA. In fact, revenues are up 200% year-over-year (as of July).

Box CEO and co-founder Aaron Levie is one of the pioneers in the cloud business. Oh, he’s only 27.

Hubspot: It operates a platform that helps companies get more value from their social media campaigns. It raised $35 million in venture funding back in early November, bringing the total to about $100 million since the company’s inception.

Hubspot has over 8,000 customers, and its growth has shown no signs of slowing. And it now plans to aggressively move into foreign markets. Of course, an IPO could be a big help for the effort.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.”  Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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