In August’s IPO Watch, we highlighted a trend for numerous rounds of increasingly large late-stage funding into mature businesses as preparation for listing (hello, Uber… Read more
In August’s IPO Watch, we highlighted a trend for numerous rounds of increasingly large late-stage funding into mature businesses as preparation for listing (hello, Uber and Airbnb). This month we focus on a business which has taken the opposite route: Xurpas Inc.
Little known outside its native Philippines until it filed for IPO with the Philippine Stock Exchange in October, the 13-year old mobile games and content provider has had plenty of time and opportunities to go through multiple funding rounds, but it eschewed all forms of capital raising, going straight to IPO without ever taking out a loan or investment. Whilst it has yet to export its business beyond national boundaries, growth within the Philippines has been exceptional. The IPO prospectus of Xurpas shows revenue growth of 75% on average per year since 2011 and enviable margins of 42% average earnings before tax.
At the time of writing, the date of listing had not been finalised, but Xurpas was reported as witnessing a “brisk” demand for its shares with the order book is more than 100% covered at the maximum price. It is difficult to imagine a typical Western technology company being able to grow to IPO size without backing these days – even bootstrapped GoPro eventually took US$2 million from Foxconn before listing. Zoho, the Indian online business, productivity and collaboration app provider headquartered in Pleasanton, California is the notable outlier, and Sridhar Vembu – founder and CEO – has little desire to raise external funds, whether by IPO or other means, seeing slow continued growth as the path to success:
“When companies grow too fast they never figure out management and cultural issues, they just pile on layers of management,” Vembu said in a recent interview with PandoDaily. “We just learned on the job – trial by fire. We made lots of mistakes, but no major ones. That’s the good thing, when you’re small, you can correct them. And the process of making mistakes is crucial to the process of learning.”
You can disagree with Vembu on the benefits (or otherwise) of seeking external investment – and many do – but very few businesses could claim to have been steady enough to survive two tech bubbles and a broader economic recession without the protective cushion of external funds.
Xurpas and Zoho apart, the club for owners of bootstrapped businesses enjoying tens (or hundreds) of millions in revenue is a tiny one. But to give entrepreneurs a helping hand: welcome to FlightDeck!
For more information, please contact Andy Moseby.