Is It the Right Time for HubSpots 100M IPO

Digital marketing technology is all the rage in the CRM space and HubSpot co-founders Brian Halligan and Dharmesh Shah must believe Wall St. knows that.

The Cambridge, Mass.-based marketing automation provider filed for an IPO late today hoping to raise as much as $100 million. It will trade as HUBS on the New York Stock Exchange.

The IPO market for Software-as-a-Service (SaaS) vendors is lukewarm at the moment. But investors like General Catalyst, which owns 27.1 percent of the company, and Matrix Partners, which owns 17.1 percent, must think that now is the time.

Is Indirect Marketing Hot?

After all, indirect marketing tools that make effective blogging, search-engine optimization, customized landing page creation, analytics and such easier may be key to growing top lines in this new, always-on economy. Not only that, but consumers may be tired of being hit head-on and be more likely to make inquiries and purchases when the sell is soft and the timing is theirs.

Is HubSpot Cool Enough?

Earlier this year Gartner named HubSpot a “cool vendor” in CRM and indicated that the company, which caters primarily to small and mid-size business now, plans to build out a platform and be the “go to” companies of every size.

The new capital should help, as it’s likely to bump up against competition from Adobe Campaign, Oracle Eloqua and Marketo. Marketo raised nearly $80 million when it went public last year, so the $100 million HubSpot seeks may not be too far a reach.

HubSpot’s momentum is certainly on the upswing. Its revenues were $51.3 million for the first half of this year compared to $35 million during the same period a year earlier, according to the US Securities and Exchange Commission filing. The firm’s net losses also grew during the same period. They were $17.7 million, up from $16.3 million a year earlier.

Investors who understand that in subscription models revenues are realized over time, instead when a customer win is booked, will likely discount the losses.