Well, this is an interesting move. Kayak, the online travel search company based in Norwalk, CT, has filed for an initial public offering underwritten by Morgan Stanley, Deutsche Bank Securities, Piper Jaffray, Stifel Nicolaus Weisel, and Pacific Crest Securities. The proposed maximum aggregate offering price is $50 million, a surprisingly small number for a company that has raised $223 million in venture capital (most of it to purchase SideStep back in 2007).
Kayak’s S-1 investor prospectus, filed today with the SEC, contains a wealth of information on the company’s finances and business strategy. For example, Kayak’s revenue was fairly flat from 2008 to 2009 (at around $112 million), but has picked up in 2010, to the tune of $128 million in the first nine months of this year (with a modest profit of $6 million). The six-year-old company has been profitable since 2008 and has about $30 million in cash in the bank.
Its largest investors heading into the IPO are General Catalyst Partners (29.8 percent), Sequoia Capital (17.6 percent), Accel Funds (12.9 percent), and Oak Investment Partners (8.75 percent). Kayak co-founders Paul English and Daniel Hafner own 9.7 percent and 9.0 percent of the company, respectively.
As for the size of the offering, it looks like Kayak doesn’t need to raise a lot of cash to keep the doors open and keep growing. So perhaps it plans to raise a modest amount in the IPO, leave room for the stock to climb, and then provide a liquidity event for its VCs.
The IPO filing comes at a time of tremendous competition in the online travel market. Kayak is part of a coalition of companies (including Expedia, TripAdvisor, Hotwire, and Sabre Holdings) that is formally opposing Google’s planned $700 million acquisition of Cambridge, MA-based travel firm ITA Software.
We hope to have more on the significance of Kayak’s IPO filing soon, so watch this space.
