PrivCo: IPO hopes dim for Silver Spring Networks

Silver Spring Networks, the smart grid company based in Redwood City, first filed for an IPO in July 2011.

A year and a half later, they have yet to go public. That’s a long time to be waiting in the wings, and filing quarterly financial reports with the SEC that detail heavy losses, without getting out the gate.

PrivCo, a private company research firm, released an IPO research note on Silver Spring Networks to clients that says the party’s over.

“After nearly a decade of cumulative losses exceeding $400 million, over $244.3 million in venture capital funding raised, and 19 months waiting at the IPO altar after filing for its IPO in 2011, the sun will likely soon set on Silver Spring Networks IPO plans,” said PrivCo CEO Sam Hamadeh.

Eric Dresselhuys, Silver Spring’s EVP of Global Development, begs to differ.

“We’ve seen the article, and we couldn’t disagree more with the overall sensationalized conclusions,” said Dresselhuys. “The numbers don’t support his conclusion. We had a fantastic 2012.”

Silver Spring Networks has long been one of the leading companies in the highly competitive smart grid space. Founded in Wisconsin in 2002, the company provides the hardware, software and services that allow the smart grid to function and has inked deals with several leading utilities, including PG&E and Florida Power & Light. Utility contracts often mean that revenue isn’t booked for accounting purposes until the projects are done. The company has grown rapidly and had 566 full-time employees as of Dec. 31.

Silver Spring’s board of directors includes Warren Weiss of Foundation Capital, Ben Kortlang of Kleiner Perkins and Tom Werner, the president and CEO of SunPower. But investors are getting restless.

Hamedah’s note says that Foundation floated the company a $12M bridge investment to keep the lights on; the company’s filings say that Foundation will purchase $12 million shares of common stock at the IPO. We’ve got a call into Foundation to see if they can clarify.


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