Rather than raising the $80 million to $100 million it had hoped to snag on the public markets, computer hardware and software provider Sitara Networks Inc. recently secured $16 million in a “hold-over” round of venture capital financing.
Investors on the Series H deal included previous backers Charles River Ventures, Deustche Bank, MC Investors, New Enterprise Associates, Oak Hill Partners and Prism Ventures. To date, Sitara has raised a little over $85 million in private equity financing.
Sitara initially filed to go public with the Securities and Exchange Commission last November, with Deutsche Banc Alex Brown acting as lead underwriter alongside co-managers Chase H&Q and Thomas Weisel Partners. Edward DeArias, a vice president at Sitara, said Deutsche was concerned the IPO wouldn’t do well because of the market correction and thought it was better to wait and raise some additional private money in the meantime.
“We still are going public as soon as the markets are ready,” DeArias added. “This is our mezzanine round and we wanted to bring as little as we needed to get by. This round is not in lieu of going public.”
Sitara plans to use the cash to fuel the company’s growth and to help it achieve profitability. Founded in 1996, Sitara finally came out with products in March and is now seeing revenue. DeArias claims the company is seeing 100% growth in revenue from quarter to quarter and has over 200 clients.
Approximately 100 companies have pulled their IPOs since January 2001, according to The IPO Reporter. Less than 30 companies have managed to go public during the same timeframe.