Mortgage technology vendor Ellie Mae registered its common stock with the Securities and Exchange Commission last month, lowering not only its initial public offering price, but the amount of money it hopes to raise in the capital markets.
Ellie Mae lowered its price to $6 per share—off 40% from the IPO price disclosed previously in an SEC filing. The mortgage technology firm at press time estimated the net proceeds of the IPO would be $21.4 million, not the $40 million to $60 million the company said it would yield at a per share price of $9 to $11. The Pleasanton, Calif.-based software firm is offering 5 million shares and current shareholders intend to sell an additional 2.5 million shares under the stock symbol ELLI on the New York Stock Exchange.
The IPO has faced a number of setbacks since filing its first registration papers on April 30, 2010, including the change of lead underwriter from Goldman Sachs to Barclays Capital. Of the original six underwriters, only William Blair and Co. and Piper Jaffray remain involved in the deal, according to Ellie’s current (and seventh amended) Form S-1. Morgan Keegan is also currently listed as an underwriter, replacing Keefe, Bruyette & Woods, Macquarie Capital and ThinkEquity.
In 2009 Ellie Mae managed a small profit of $1.7 million on revenues of $38 million. The 13-year-old firm got its start in mortgage banking by offering website technology aimed primarily at loan brokers. It then expanded out its business footprint by becoming a broker LOS with the acquisition of both Genesis and Contour, and eventually expanded further to cater to midtier mortgage lenders. It was founded by industry veteran Sig Anderman.
Also last month, real estate listing and mortgage rate search website company Zillow registered with the Securities and Exchange Commission, seeking to raise $51.75 million from the initial public offering of its common stock.
The company generates revenue from advertising of real estate sale and rental listings and mortgage rates. Revenue has increased from nearly $4.3 million in 2006 (its first year of operation) to $30.5 million in 2010, including a 74% year-over-year increase from 2009 to 2010.
Zillow has never posted an annual net profit, losing more than $20 million in both 2007 and 2008. The company’s net loss of $6.77 million in 2010 was 47% lower than its net loss of $12.85 million in 2009.
Zillow’s Mortgage Marketplace launched in April 2008. In less than a year, it provided one million rate quotes. During 1Q111, users requested nearly one million rate searches. In January 2010, the company began charging lenders to post their rates on the site. Lenders pay a cost per click fee to publish rates and generate leads from Zillow’s search service.
Citi is the sole underwriter of the IPO, with Allen & Company, Needham & Co., ThinkEquity and First Washington Corp. servicing as co-managers.
The company has seen a surge in users since releasing its first mobile application a year ago, which are accessible on Apple’s iPhone and iPad, as well as versions compatible with the Google Android and BlackBerry platforms. In March, Zillow had a combined 19.4 million unique users on its website and mobile platforms, up more than 90% from the March 2010.
Zillow real estate listings also populate the Yahoo Real Estate Web page, through a partnership that includes rights for Zillow to sell subscription advertising on the Yahoo website.
