openBC, soon to be named XING has announced an IPO in the next 6 months. And expectedly, the press has jumped on the bandwagon to report galore about it. What is indeed quite exciting to see how the markets will receive a succesful social network going public. The fundamentals are strong: 1.5 mn members, out of which 13.8 % pay the monthly premium of EUR 5.95 and member growth still running on a trajectory.
On the other hand, it will be interesting to see to which valuation the markets will arrive, especially as there haven’t been any recent benchmarks. Furthermore, investment-guru Ram Shriram explained last week at the Web 2.0 Summit in San Francisco that the public markets were much more difficult to access than during the New Economy, and now only being available for valuations north of US-$ 1 bn. Therefore, a trade sale to another company like in the examples of About.com or recently YouTube, is the typical exit route.
Having said that, in favor of openBC: This is not America, with all the burden that compliance with the Sarbanes-Oxley Act brings along. And second, more importantly, openBC has nothing, but absolutely nothing to do with lots of idiotic business models that were pushed into the public markets just to satisfy their endless hunger for the cash burning-engine during the bubble. openBC is a 3-odd year old company which has amazingly generated cash since month 3.
There is still some steep way ahead and heavy lifting needed, but I give openBC to become public XING a thumbs-up and gladly dedicate this pic which I look last Friday in San Francisco briefly before I left.
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