Local Business Reviews Site Angie's List Files For $75 Million IPO
After Jive's $100 million IPO filing yesterday, local business reviews site Angie's List is throwing its hat into the ring, filing an S-1 this afternoon. The company will raises as much as $75 million, according to the filing.
Context & Ripple Effects
Angie's List is the second company in as many days to put its paperwork on file: enterprise social software maker Jive submitted its $100 million S-1 just yesterday, and the local-reviews site followed this afternoon with a filing for up to $75 million. The back-to-back filings matter because they test whether the 2011 public markets will absorb two very different subscription businesses — one selling to enterprises, one selling to consumers and local service providers.
First-order effects
- Angie's List now faces public-company disclosure for the first time, exposing the economics of its paid-subscription reviews model — renewal rates, marketing spend per member, and profitability — that competitors could only guess at before.
- Jive and Angie's List together become the immediate read on whether underwriters can clear consumer- and enterprise-software deals in the same week.
Second-order effects
- Rival local-review and services-marketplace players get a public valuation benchmark for the first time, forcing them to justify their own monetization against Angie's List's disclosed numbers.
- If either deal prices well, bankers gain a template for taking other subscription-content businesses public, tightening competition for the next slots in the IPO pipeline.
Third-order effects
- A successful pair of offerings would signal the reopening of the technology IPO window in 2011, pulling more late-stage private companies toward filings rather than waiting for acquisition exits.
- Public scrutiny of Angie's List's paywall model would pressure the broader local-reviews category to prove that paid membership — not free listings plus ads — can sustain growth at scale.
The trend: Consumer- and enterprise-subscription internet companies are queuing back into the public markets in 2011, with each filing testing investor appetite for the next.