Wireless speaker company Sonos Inc filed for an initial public offering on Friday, riding on the back of increasing popularity of streaming music though smartphone apps on connected audio systems. It set a placeholder amount of $100 million, but did not specify an offering price or size of the offering.
Sonos, a pioneer in the market for internet-connected speakers, is targeting a valuation of $2.5 billion to $3 billion in the IPO, said people familiar with the matter in April, who asked not to be identified because the plans are private.
The Santa Barbara, Calif.,-based company said it intends to list on the Nasdaq Global Select Market under the symbol SONO. For example, Sonos One and Sonos Beam feature voice-control enablement powered by Amazon's Alexa technology while Amazon now competes by offering speaker products of their own. With Alexa-powered Sonos speakers, customers can use voice commands to play music and operate other smart devices.
The company was founded in 2002 and has been led by Patrick Spence since January 2017.
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In the past year, Sonos has focused its products on voice-enabled speakers. Things look a bit better more recently, however, as the company earned $655.7 million in the six-month period ending March 31, 2018, an 18 percent increase compared to the year-ago period.
The company launched the Sonos One, an Amazon Alexa-controlled smart speaker that competes with the Echo, Google Home and Apple's HomePod; in June Sonos debuted a new voice-controlled home theatre speaker for living rooms, called the Beam.
For 2017, it reported revenue of almost US$1-billion, up 10 per cent from a year earlier. The company has sold approximately 19 million products that are used in 6.9 million households worldwide.
Sonos is diversifying its voice offerings, promising integration with Google Assistant and Apple's Siri this year. "Because AWS runs its own platform that we access, we are vulnerable to both system-wide and Sonos-specific service outages at AWS". It estimated that customers listened to 5 billion hours of audio content using Sonos products previous year, a 33 percent increase from 2016. KKR is its biggest single shareholder, holding 25.7% of pre-IPO outstanding shares in the company, while Index Ventures owns 13% and Redpoint has 5.2%, according to the Sonos filing.