Shares of wireless broadband provider Clearwire Corp. (Nasdaq: CLWR) debuted to a lukewarm reception in its IPO last week, but it still set the stage for a profitable exit by venture backer Intel Capital.
Kirkland, Wash.-based Clearwire raised $600 million in the offering, selling 24 million shares priced at $25 per share. Shares were flat in first-day trading last Thursday, hovering at $25 for most of the day, after dipping as low as $24.46 and reaching as high as $27.95. The stock ended its opening day with a drop of less than 2%, closing at $24.62.
Clearwire delivers wireless broadband services using an emerging standard known as WiMAX, developed for community and city-wide networks. Since 2000, the company, led by cellular industry pioneer Craig McCaw, has raised about $1.3 billion in venture funding from no less than 10 venture funds and corporate investors.
The company raised its largest infusion in July 2006, a $900 million round led by Intel Capital, which invested $600 million, and Motorola Ventures. Previously, the company had raised just under $400 million in seven funding rounds between 2000 and 2006.
Intel was the largest venture beneficiary of the IPO exit. Last summer, Intel purchased 23 million shares of Class A common stock and 10 million shares of Class B common stock (35% of the total), for $18 per share.
Together, Intel and Eagle River Holdings, McCaw’s investment company, are the largest holders of Clearwire Class A shares, each controlling 37 million shares, or more than 60% of the total. Other corporate backers include Motorola (which owns 15% of the Series A shares), Bell Canada (12%) and OB Wireless (6.3%).
None of the company’s early stage venture backers owns more than 5% of its stock. They include CIC Partners, Convergent Investors, GS Capital Partners, Liberty Associated Partners, Pharos Capital Partners and Edgewater Funds.
Clearwire’s ability to launch its IPO without reducing its proposed offering price bodes well for of venture-backed companies that have yet to post a profit.
The company reported a loss of $284 million in 2006 on revenue of $100 million, compared to a loss of $140 million on revenue of $33 million in 2005. The company states in its prospectus that it expects to continue to incur “significant losses” as it builds out its network.
Today, Clearwire offers service in 35 metropolitan areas, covering more than 350 municipalities in 12 states, as well as in Ireland, Belgium and Denmark. As of December, the company said it had just over 200,000 subscribers.