LinkedIn, a social network for 90 million business people, plans to raise $175m in its flotation on either the Nasdaq or New York stock exchanges after doubling its revenues in the first nine months of last year.
In the nine months ended September 30, net revenue increased $80.6m, or 100%, and adjusted earnings before interest, tax, depreciation and amortisation increased $22.3m, or 238%, over the first three quarters of 2009, according to its regulatory filing. This followed a three-quarters rise in number of registered users to 90 million at the end of last year from 55 million at December 31, 2009, and 32 million in 2008. Page views effectively doubled in the past year to 5.5 billion in the final three months of 2010, compared to 2.8 billion in the fourth quarter of 2009.
However, in its initial public offering (IPO) prospectus, LinkedIn said it would not be profitable this year as it invested in its products and warned a "a substantial majority of our page views are generated by a minority of our members".
Outside of management, venture capital firms Sequoia Capital, Greylock Partners and Bessemer Venture Partners own the largest proportion of LinkedIn with 18.9%, 15.8% and 5.1% respectively.
LinikedIn has raised more than $100m from investment bank Goldman Sachs, publisher McGraw-Hill, SAP Ventures, the corporate venturing unit of Germany-based software company SAP, and venture capital Bain Capital, Bessemer, Sequoia, Greylock and European Founders Fund.
LinkedIn revealed its plans to raise capital in the public markets a day after Internet company Demand Media raised about $151m in its IPO, and as investor-interest and valuations are surging for privately-held online Facebook, Zynga and Groupon.
Investment banks Morgan Stanley, Bank of America and JPMorgan but not Goldman Sachs are advising on the LinkedIn IPO. Law firms Wilson Sonsini Goodrich & Rosati and Cooley are counsel for LinkedIn.