Partners defend Mimecast's decision to list in US
Email security and archiving vendor snubs UK roots as it pursues Nasdaq IPO
Partners have leapt to Mimecast's defence after it opted to spurn its UK roots and perform its initial public offering (IPO) in the US.
The UK-based email security and archiving vendor filed an F-1 form with the US Securities and Exchange Commission on Friday setting out plans to float on the Nasdaq.
Founded in the UK in 2003, Mimecast's corporate headquarters remain in Moorgate, while 42 per cent of its $116.1m revenues last year were generated here, compared with 38 per cent in the US.
Analyst Megabuyte said it is "disappointing" to see a UK-grown tech firm list in the US, while The FT described its decision as a "blow" for the London Stock Exchange, which is trying to woo tech firms through a new High Growth Segment.
Mimecast's chief executive, Peter Bauer has been based in Massachusetts for four years - while its private equity investors are also all US based - and partners were quick to sympathise with the vendor's aspirations to grow in the US.
Pete Sherwood, managing director of Mimecast partner Infosec Cloud, claimed UK customers will ultimately benefit from the move, which could see Mimecast valued at about $1bn.
"Mimecast's decision to file on Nasdaq, rather than the LSE, is a natural progression allowing the company to sit alongside leading global cyber-security companies, access a larger investment base and strengthen the company's foothold in the US market," he said. "This can only be good for Mimecast's future growth and good news for our UK customers."
Andrew Thomson, managing director of Caudex agreed.
"They saw that the US market is large and one they wanted to target," he said. "I think the IPO will be good for them as they're always keen to invest in strengthening the product offering and services.
"Mimecast are more focused on what they do than a lot of the other vendors in that space, who also have a web security presence. And only a very small amount of customers have a bad word to say about them - they need to keep doing what they're doing."
In its filing, Mimecast revealed that it turned a small net profit of $285,000 on sales that rose 31 per cent to $116.1m in the year to 31 March 2015. Boasting 14,500 customers, Mimecast generated 62 per cent of sales from its channel partners last year.
"In order to grow our business, we anticipate that we will continue to depend on our relationships with our channel partners who we rely on, in addition to our direct sales force, to sell and support our services," the vendor said in the document.
Analyst Megabuyte said: "Whilst on the one hand it is disappointing to see a leading UK grown technology business choose to list in the US rather than on the LSE, it is not surprising given Mimecast's US VC backers Dawn Capital, Index Ventures and Insight Venture Partners which, combined, have invested around $90m, along with the fact that its CEO has been based in Massachusetts since 2011."