Riverbed Technology, which competes against some fierce foes in the WAN-application optimization marketplace, will have its initial public offering (IPO) next week.
Based in San Francisco, Riverbed had 2005 sales of $22.9 million, up from 2.6 million in 2004. According to an Associated Press news item on the impending IPO, Riverbed intends to use the proceeds, expected to total about $56.8 million, for working capital and to grow and develop new products.
This is a case where Riverbed really had to turn to the public markets, despite not meeting with the sort of rabid investor enthusiasm that the company hoped to encounter on the road to an IPO.
Riverbed had been through the VC investment cycle, and its financial stakeholders were looking for an exit. At the same time, the company need the capital to fortify itself for technology and sales battles against formidable competitors such as Cisco Systems, F5 Networks, Citrix (through its acquisition of NetScaler), Packeteer, and Juniper Networks.
There’s no question that an acquisition might have produced a better return on investment for the company’s backers, but that option, at least at a price attractive to Riverbed, was not on the table.
Now we’ll see whether Riverbed, which has grown its customer base from 68 to more than 1,000 during the past two years, can continue to make meaningful headway against some unrelenting adversaries. Although the company has executed exceedingly well during the past couple years, the road will get bumpier and go uphill from here.