Apigee (APIC) provides an innovative software platform that allows businesses to design, deploy, and scale APIs as a connection layer between their core IT systems and data and the applications with which their customers, partners, employees and other users engage with their business.
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APIC is based in San Jose, CA. It scheduled an $87 million IPO on Nasdaq. The market capitalization is $495 million, at a price range midpoint of $17. The expected IPO date is Friday, April 24, 2015. SEC filings
The manager and joint managers are Morgan Stanley, J.P. Morgan, and Credit Suisse. The co managers are Pacific Crest, JMP Securities, and Nomura
Apigee (APIC) IPO Valuation
Mrkt Cap (mm)
% offered in IPO
Apigee (APIC) IPO Conclusion
Subscriptions, support & professional services account for 70% of rev
Rev +39%; Gross profit +148%; gross margin 61%
Gross billings +59%, Deferred revenue +91%
Net loss -82% of rev
Price-to-sales 7.7, price-to-book 4.9
P/E -9.2 indicating relatively heavy cash burn
Apigee (APIC) Market
APIC believes that application programming interfaces, or APIs, are a critical enabling technology for the shifts in mobile, cloud computing, big data and the Internet of Things (IoT) and that APIs are a foundational technology on which digital business operates.
APIC believes that a new and expansive market opportunity exists to help enterprises adopt digital strategies and navigate the digitally driven economy.
Apigee (APIC) Business
APIC provides an innovative software platform that allows businesses to design, deploy, and scale APIs as a connection layer between their core IT systems and data and the applications with which their customers, partners, employees and other users engage with their business.
The foundations of the platform are Apigee Edge, a robust API-management solution, and Apigee Insights, the predictive analytics software solution.
APIC's platform enables a comprehensive view of the enterprise data the user is consuming and generating, and data about the context in which the customer is using the digital product or service, or contextual data.
In addition, APIC's platform provides tools for businesses to drive usage and adoption of APIs by their business partners and developers.
Using APIC's platform, businesses in any industry can easily and securely connect their core services and data to developers to enable them to develop applications and experiences for customers, partners, employees and other users.
Using APIC's platform, businesses can forge new partnerships, build partner ecosystems, and participate fully in emerging digital business networks.
Apigee (APIC) Customers
Customers include many leading businesses: 20 of the Fortune 100, five of the top 10 Global 2000 retail brands and six of the top 10 global telecommunications companies as of January 31, 2015.
APIC's solution has been sold to customers in over 30 countries around the world.
Apigee (APIC) International revenue
APIC's revenue derived from sales to customers located outside the United States was approximately 16%, 16% and 33% in fiscal 2012, 2013 and 2014, respectively, and 33% and 38% in the six months ended January 31, 2014 and 2015, respectively.
APIC expects that sales to customers located outside the United States will continue to comprise a significant portion of total revenue for the foreseeable future.
Apigee (APIC) Channel partners
In fiscal 2013, APIC expanded its network of channel partners by entering into a master alliance agreement with Accenture, under which either APIC co-sells or they resell APIC solutions as part of larger installations.
In fiscal 2014, APIC announced an OEM and reseller partnership with SAP (SAP) -- $86 billion market cap -- under which SAP will deliver a comprehensive API management application built on APIC's Apigee Edge product on SAP’s Hana Cloud to SAP’s cloud customers, and sells APIC's Apigee Edge product on a standalone basis to its on-premises customers.
Apigee (APIC) Marketing & sales
APIC sells its products through direct field sales, direct inside sales and indirect channel sales.
Software sales pricing is based on the customer’s usage.
On-premises license sales are based on the number of computer server cores, while cloud-based services sales are based on API traffic.
Many customers initially use the product as a free trial by visiting APIC's website, creating an account and testing the free cloud version of the platform.
In addition, APIC offers open source solutions that introduce developers to the key technical concepts and technologies of APIs and mobile app development, and that allow their APIs and applications to be migrated or deployed to APIC's paid products.
APIC uses the trial program as a source of lead volume for the direct sales team.
Apigee (APIC) Intellectual property
APIC had nine issued patents and eight patent applications pending in the United States as of March 31, 2015. Issued patents expire between 2028 and 2029.
APIC also licenses software from third parties for integration into solutions, including open source software and other software available on commercially reasonable terms.
Apigee (APIC) Competition
The market for enterprise API-based platforms is fragmented, rapidly evolving and highly competitive.
APIC competes against in-house or custom development efforts, a variety of large software vendors and smaller specialized companies and open source initiatives, all of which vary in the breadth and scope of the products and services offered.
Beyond in-house or custom development efforts, APIC's competitors include International Business Machines Corporation (IBM) and Oracle Corporation (ORCL), both of which can bundle competing products and services with other software offerings, or offer them at a low price as part of a larger sale.
Larger and more established companies may focus on API management and API-based platforms and could directly compete with APIC. Smaller companies could also launch competing or new products and services.
5% shareholders pre-IPO
Entities Affiliated with Bay Partners 18%
Entities Affiliated with Norwest Venture Partners 26%
Entities Affiliated with Third Point Partners 12%
Wellington Management Company, LLP and certain of its investment advisory clients 8%
Apigee (APIC) Dividends
No dividends planned
Apigee (APIC) IPO Use of proceeds
APIC expected to net $77 million from its IPO. Funds are allocated for general corporate purposes, including working capital, sales and marketing activities, solution and platform development, general and administrative matters, and capital expenditures.
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