September 19, 6:00 pm EST – Trulia Inc. (PrivCo Private Company Ticker: TRULIP) has set the final terms for its IPO, pricing its shares at $17/share, above its initial range of $14-$16 (PrivCo valuation at $33/share, almost double IPO price). Trulia is only the second consumer Internet IPO since May 18th when Facebook (NASDAQ:FB) went public, and the first since July 2012 when Kayak (NASDAQ:KYAK) went public.
- Trulia will raise $102 million by offering 6 million shares, mustering an implied equity valuation of $448.4 million (according to PrivCo calculations).
- PrivCo equity valuation of Trulia is $33/share based on comparable companies revenue-multiples analysis.
See Below For PrivCo's Breakdown Of The Trulia IPO:
1. TRULIA, INC. (PrivCo Private Company Ticker: TRULIP)
Offering Size: 6 Million Shares (83% Primary, 17% Secondary)
Final IPO Price: $17 / Share
Revenue: $77M (PrivCo projection for Trulia 2012 revenue, +97% over 2011), $39M (2011), $20M (2010), $10M (2009)
1 Year Revenue Growth (2010-2011): 95%
Net Income: -$6M (2011), -$4M (2010), -$7M (2009)
Final Offering Amount: $ 102 million
PrivCo Valuation of Trulia: $33 / Share (Using comparable company revenue-multiples analysis, including Zillow (Nasdaq:Z))
NYSE Trading Begins: September 20th, 2012
Use of Funds: General corporate purposes, including working capital
Zillow (Nasdaq:Z) has performed phenomenally, up 113 % since its IPO. IPO Investors love to compare companies directly to something that they know has recently worked. Trulia will benefit from that as it is asking for a EV/Revenue (LTM as of June 30, 2012) Multiple of 6.4 times, compared to Zillow asking for EV/LTM Revenue (March 31, 2011) of 14.4 times.
Trulia's "Made for Mobile": nothing more mobile than house hunting. With Trulia mobile, you can simply click on your mobile phone to see floor plans, contact agent for last minute viewing, making the entire process on the go, something that Trulia is taking advantage of. While the rapid shift to mobile device usage has been harming Internet companies such as Facebook, Zynga, and AOL, the shift to mobile device access actually is helping Trulia. Trulia is among the few "pure play" mobile Internet IPOs.
In the real estate ecosystem, a Trulia subscription has become a must-have, with an appetite also from house hunters who take advantage of a lower price point subscription offering to look up comparable sales in the area. Recurring revenue, if anything, is a very important metric for predictable earnings visibility as a public company.
Trulia is a sales-force focused company that, unlike Facebook and others, sell ads that consistently perform well for clients (according to PrivCo research). Also, Trulia has gained particular traction recently in its Media Sales (ad sales) arm. Trulia's sterling sales management team is overseen by COO Paul Levine, a veteran with over a decade of experience leading sales forces selling online local and mobile at Yahoo (NASDAQ: YHOO) and Eventbrite (PrivCo Private Company Ticker: EVENBP), and VP of Sales Eric Oldfield, a longtime internet sales professional with proven traction in media sales at email marketing firm LiveIntent (PrivCo Private Company Ticker: LIVEP). Throw in rising media sales stars such as Michael Morris - whom Trulia hired from LiveIntent - with satisfied repeat ad customers (renewing ad contracts at high rates and increasingly larger spends, based on PrivCo research). Trulia's largest advertisers by ad spend currently from Verizon to JP Morgan Chase's mortgage arm and Liberty Mutual's homeowners insurance division according to PrivCo sources. As Facebook has learned, poor or unmeasurable ad performance will not win or retain clients, something Trulia understood early. In conclusion, Trulia has a winning recipe for continued growth on the mobile Media Sales (ad sales) side of its of the business.
Trulia Risks: Trulia's primary risks as an investment is its revenue concentration: Per PrivCo analysis of Trulia's S-1 filings, Trulia's top 10 advertisers made up over 60% of revenue in first half of 2012, up from 50% in 2011. However, this is something that has been true for a while and is a "high class problem", as the sales team is retaining its biggest clients, who continue to spend more year after year, and delivering a positive ROI. However, the revenue-concentration must be considered a risk should Trulia lose some of these high-spending clients.