It was a quiet 2018 for initial public offerings at Orange County’s crop of technology companies, none of which made the transition from private company to public via a traditional IPO.
Might Badu Networks Inc. break the logjam? That was the promise of a mid-January set of meetings in Newport Beach, as the Irvine-based software maker gave prospective investors, investment bankers and other financiers a taste of a presentation that could make its way to Wall Street.
More than 20 high-net-worth investors and others attended the back-to-back sessions on Jan. 17 in a private room at Oak Grill restaurant inside Fashion Island Hotel to hear about the software maker’s technology, strategy and funding needs.
Badu’s raised a little under $9 million to date. It’s looking to get another $2 million before attempting a public listing, which would be on an OTC exchange.
Badu’s software, loaded onto off-the-shelf hardware, improves the mobile and wireless user experience by speeding up network connections, reducing webpage load times, accelerating enterprise applications and user traffic across the internet.
The company’s goal is to help telecom operators and large corporate users bridge the gap between 4G and 5G, the next generation of wireless connectivity that will debut in some places in the U.S. this year.
“Our target for our networking product is both telcos and enterprise,” said Chief Executive Dennis Vadura, who started the company in 2012 with Tony Wong, a longtime marketing exec who serves as chief operating officer.
Other execs include Chief Marketing Officer Jim Campigli, co-founder of WANdisco PLC (LSE: WAND), a software company that raised $24 million in a 2012 IPO on the London Stock Exchange.
Badu employs about 10 people in its offices near John Wayne Airport. It reported about $4 million in sales last year. This year, it expects to post a profit for the first time, according to its presentation.
Company executives displayed a growing list of corporate partners at the event, including True Online in Thailand, Telstra Corp. in Australia, and Tokyo-based Rakuten Inc. It works with resellers to distribute its products.
The roadshows, which included a Jan. 18 luncheon in Westwood at Skylight Gardens restaurant, were hosted by Alan Stone & Co. and WallStreet Research based in Los Angeles.
The local events were billed by the L.A. firms as a potential precursor to a pre-IPO roadshow, which could take place this year if market conditions are conducive.
OC notched four IPOs last year, all in the healthcare industry and based in Irvine.
Another tech-related firm, Irvine esports company Alliance Esports International Inc., looks likely to go public this year, but not via a traditional IPO.
It’s being acquired through a reverse merger with a blank check firm Black Ridge Acquisiton Corp. (Nasdaq: BRAC).
Moving South
A new year, a new acquisition and a new headquarters.
Cloud services provider Zumasys Inc. is off to a fast start for 2019.
On Jan. 1, the company closed its buy of OpenQM, a database operator from U.K.-based Ladybridge Systems.
Financial terms of the transaction were undisclosed.
Under the agreement, Zumasys acquired OpenQM’s core product called “NoSQL database,” which essentially provides a mechanism to store and retrieve data. It’s a key component for enterprise resource planning customers, according to co-founder and President Paul Giobbi.
“Tens of thousands of users around the world from North America to Europe to South Africa to Japan rely on OpenQM daily to run their ERP systems,” he said.
Senior database architect and database creator Martin Phillips joined the Zumasys development team as part of the deal.
Zumasys has been the exclusive global distributor of OpenQM since 2015.
On Jan. 17, the company held an open house at its new digs in San Clemente; a homecoming of sorts.
It got its start in the coastal OC city 18 years ago, but had been most recently based in Irvine.
Zumasys acquired the 18,000-square-foot property at 1050 Calle Amanecer in 2014 for about $2.6 million, property records show. It concluded $300,000 worth of renovations on the property in December; upgrades feature an industrial, modern design.
The open house event for the company’s new headquarters featured food from The Lime Truck, and benefited Michael Coulson, a longtime San Clemente resident and former Microsoft executive recently diagnosed with brain cancer.
Zumasys had grown to about $30 million in annual sales and 100 employees, before divesting its cloud hosting, infrastructure and managed services business units in June to IT services provider NexusTek on undisclosed terms.
Zumasys, which retained its brand and software division, now employs 30. NexusTek’s local operations are based in the company’s old headquarters in the Irvine Spectrum.
