SoundBite Seeks $69 Million in its IPO

 
SoundBite Communications Inc. yesterday reported its plans to go public, filing a registration document with the U.S. Securities and Exchange Commission. Burlington, Mass.-based SoundBite seeks to raise $69 million in its initial public offering, according to its S-1 filing with the SEC.  

SoundBite is a provider of on-demand automated voice messaging (AVM) systems for collections, customer care and marketing. The system is geared toward agentless communications and is sold under a usage-based pricing model, with prices calculated on a per-minute or per-message basis. 

SoundBite estimates the market for AVM systems will rise from $370 million in 2005 to $1.4 billion in 2010. 

Clients include 14 of the 20 largest collection agencies in North America based on 2006 revenue, and clients used its system to make 1 billion calls last year, according to the S-1 filing.  

Indeed, most of SoundBite’s revenues come from collection firms, with the industry accounting for 31% of its revenues in 2004, 67% of revenues in 2005 and 80% of revenues in 2006, according to the filing. Additionally, two collection industry clients accounted for a total of 32% of revenues in 2005 and 26% of revenues in 2006. 

Revenues totaled $7.8 million in 2004, $16.4 million in 2005 and $29.1 million in 2006. On the bottom line, SoundBite lost $866,000 in 2004, lost $1.2 million in 2005, and lost $123,000 in 2006.  

One major competitor is West Corporation, a provider of outsourced communications services. In February it bought AVM provider CenterPost Communications and in March acquired TeleVox Software, a provider of AVM services to the healthcare industry. 

The company had 125 employees as of the end of the first quarter.

SoundBite reported it will use the IPO proceeds to pay off its outstanding debt of $3.5 million, for general corporate purposes, and possibly to “acquire businesses, technologies and products complementary to our operations.”

Investors in SoundBite include Commonwealth Capital Ventures III L.P. (with CCV III Associates L.P.), Mosaic Venture Partners II Limited Partnership, North Bridge Venture Partners IV-A, L.P., North Bridge Venture Partners IV-B, L.P. and Venture Capital Fund of New England IV, LP, each of which owns more than five percent of our outstanding voting securities.

The IPO will be led by Cowen & Co., Thomas Weisel Partners, Needham & Co., Cantor Fitzgerald and America’s Growth Capital. 

The company is in its quiet period leading up to the stock offering.