Why Intucell Said No to an IPO

Today, Cisco (NASDAQ:CSCO) announced the $475 million purchase of Intucell, a previously private company that developed technology to help mobile carriers better manage their networks.

So, why did Intucell opt for a sale instead of an IPO?

Well, this morning I had to talk to Bob Goodman, a partner at Bessemer Venture Partners — a firm that invested $6 million in the company back in early 2011, when Intucell had just six employees. Intucell’s growth surged from there, sparked in large part by a subsequent mega-deal with AT&T (NYSE:T).

Goodman, who was on board during the deal, also has a solid background with taking companies public. For example, he is on the board of Millennial Media (NYSE:MM), which raised more than $130 million in its 2012 IPO.

In Intucell’s case, Goodman said it was too early to pull off a public offering.

“The company was two to three years away from a revenue perspective,” he said.

Goodman believed Intucell could have turned into a big company, but he said his firm is driven by what entrepreneurs want to do.

“They are very excited to be a part of Cisco, which will help to accelerate the growth of the company,” he said. “Cisco also offered a price that was really attractive to the entrepreneurs.”

Goodman also said “the growth in mobile use will continue to grow quickly,” and that we’ll be likely to see more mobile deals hit the market, as well as some big M&A transactions.

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.