Social Network Viadeo Shelves IPO Plan
Viadeo, the world's second-biggest social network for professionals behind LinkedIn, is deferring a plan for an initial public offering (IPO), preferring instead to focus on growth in emerging markets, its chief executive said.
The France-based start-up had been mulling an IPO in Europe, the United States or Hong Kong in a bid to surf on a wave of investor interest in technology start-ups that has sent valuations sky-rocketing in recent months.
Viadeo's rival LinkedIn is in the midst of listing part of its capital on Wall Street and hopes to raise around $150 million to further its product expansion, hiring and acquisitions.
Chief Executive Dan Serfaty told the Reuters Global Technology Summit that Viadeo would reconsider a listing in roughly 18-24 months.
"We saw a tremendous level of interest by bankers, private equity investors and venture capitalists," said Serfaty. "But we decided that our fundamentals were good enough that we could wait for a listing and instead focus on growing the business."
Serfaty said he was worried that a flotation would hamper the company's ability to invest heavily to expand in emerging markets in Asia and Latin America in the coming years.
"We want to grow and not be faced with the pressure to deliver profitability right away," he said. "There is a risk of going public too early."
Viadeo, which says it has more than 35 million users, is seeking to position itself as the more international cousin of LinkedIn, with its users coming from Europe, China, India and Latin America.
Serfaty added that there was so much money available from private equity and venture capitalists that even if the company needed funds to fuel its expansion, it could collect them easily without going public.
LinkedIn, which says it has more than 100 million users, focused in the U.S., has set a price range for its IPO that values it at $3 billion or around 12 times 2010 sales.
In comparison, search engine giants Google and Yahoo are valued at 6 and 3.5 times 2010 sales respectively.
Both LinkedIn and Viadeo have business models focused on free initial access for users to post their resumes, followed by paid access for premium users. The sites also sell advertisements to generate revenue.
(Editing by James Regan)