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Two more venture-backed startups had a tough time of it during their debut in the public markets yesterday. Web analytics startup Omniture opened around $6.05 before promptly falling as low as $5.60 before climbing back to about $6.20 in the afternoon. Biotech startup Replidyne opened at $10.05, and hit a high of $10.20 before settling back to $10.00 in midday trading yesterday. Both companies sold their stock well below their initial pricing ranges.
The Deal's George White and Carolyn Murphy sized up the implications of another disappointing set of VC-backed IPOs:
It was hoped that Omniture's IPO would provide a sliver of hope for small but successful technology companies considering entry into the public markets. The dismal debut of Internet phone service pioneer Vonage Holding Corp. last month put a damper on an already difficult technology IPO market, and the poor reception for Omniture's IPO may solidify the conventional wisdom that startups should avoid going public until they generate at least $100 million in annual revenue.
Venture capitalists can only hope the $100 million revenue criteria does not return. That tighter criteria would dramatically lower the number of venture-backed IPOs and provide corporate acquirers with even more leverage in negotiations. The upshot of all that is lower exit valuations.
For more on the state of the IPO market, see:
Tags: IPOs, omniture, replidyne, vc, venture capital
