Tags: Evernote | IPO | delay | subscribers

Evernote Delays IPO as Online Notes Service Seeks Paid Users

Friday, 24 August 2012 02:54 PM

Evernote Corp., an online note-taking and document storage service, plans to hold off on an initial public offering until at least 2015 as it works to convert users of its free product into paid subscribers.

Watching Facebook Inc. lose roughly half its value since an IPO in May has made Evernote Chief Executive Officer Phil Libin want to “stay private as long as we can.” While Evernote’s membership has more than tripled to 38 million over the past year, only about 1 million are subscribers paying $5 a month, or $45 a year, Libin said in an interview.

Facebook “reinforces the approach of IPO slowly,” Libin said. “The best time to IPO is when the market is kind of boring.”

In the wake of Facebook’s troubled IPO and concerns over its ability to make money from its 955 million users, Evernote joins Internet startups including Airbnb Inc., LegalZoom.com Inc. and MobiTV Inc. in delaying planned public debuts. After a $70 million funding round in May gave Redwood City, Calif.-based Evernote a $1 billion valuation, Libin said he doesn’t need to rush to the public markets. Waiting longer before an IPO “is the best thing for the company,” he said. “This is the time where we get to have fun and take risks.”

Evernote, like Dropbox Inc. and Box Inc., lets users store their notes, documents, images and other content in the cloud. That means the information is kept in remote data centers, accessible from any Web-connected device. The companies make money by using a so-called freemium model, offering a free version of their products that can be upgraded to a paid membership with more perks.

Corporate Services

Technology companies focused on corporate services have fared better in recent IPOs, encouraging Libin to expand beyond his company’s consumer roots to offer more options for businesses. Evernote is introducing a $10 monthly subscription service for small businesses to collaborate on projects and compare notes, Libin said today during a presentation at the Evernote Trunk Conference in San Francisco.

Evernote’s 230 employees recently moved to a 87,774-square- foot office building off Highway 101 in Redwood City. Libin named each conference room after video games, organized alphabetically by floor. It has offices in cities including Beijing, Tokyo, Taipei and Austin, Texas.

About 30 percent of Evernote’s users are from the U.S, followed by the Japan at 20 percent, Libin said. After releasing a version for China earlier this year, Evernote has been adding 60,000 to 70,000 users per day there, the second-highest grower after the U.S., he said. Revenue from Chinese users is low, he said.

“We went into China knowing it was going to be 10 years before we figure things out,” Libin said. “We know that we don’t know what we’re doing in China. So we’re going on an adventure.”

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Friday, 24 August 2012 02:54 PM
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