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Add another company to the expectant buzz surrounding the reawakening IPO market. Carbonite Inc., the Boston-based company that makes automated consumer data back-up software, is planning an initial public offering in 2010 or early 2011, CEO David Friend said.
The company, which moved into a new office this Monday, doubling its real estate footprint, plans to double its headcount in 2010 and remain profitable. It is cash-flow positive now, said Friend, but accounting rules require it to report its annual subscription fees as month-to-month revenue, which keeps it short of profitability at the moment, while the company embarks on a heavy TV ad spend.
“We have a machine where you put $1 in advertising in the top and you get $4 in subscription revenue out the bottom,” he said.
The drive train of that machine is, apparently, fear. “Have you ever thought about how much stuff is on your computer?” a stern-faced, gray-haired man asks the camera in close-up, in one of Carbonite’s four new ads. “How would you feel if you lost all that stuff?”
Founded in 2005, Carbonite has raised at least $47 million in venture financing. The most recent round, worth $20 million, came last September, led by new investor Performance Equity of Stamford, Conn., with return participation from Menlo Ventures and Lexington-based Common Angels. London-based 3i Group, which earlier this month sold off its venture holdings, had been an investor but had sold its stake to co-investors before the sale earlier this month, Friend said.
Carbonite has stiff competition — principally from Mozy, the Seattle-based consumer backup company acquired by Hopkinton-based EMC Corp. for $85 million in 2007. Established consumer computing giants have also entered the market: Hewlett-Packard has a product called Upline, and Symantec bought SwapDrive last June for $124 million.
With data centers in Somerville and Boston’s Downtown Crossing, Carbonite provides unlimited backup for $55 a year. The software works in the background, automatically backing up every file on a desktop computer.
Friend said to keep its status as a leader in that market, Carbonite has to move very carefully. Every release is meticulously controlled, he said.
That’s challenging, because the company’s data processing and storage needs long ago passed the capabilities of commercial software, Friend said. “Every commercial piece of software you buy at some point it breaks and then you’ve got to write your own.”
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