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Mavenir’s Recent IPO Recovers After a Shaky Start

Posted on Friday, Mar 14th 2014

According to a Gartner report published last year, the global spending on carrier network infrastructure grew 3.2% in 2012 to $80.5 billion in 2013. Analysts believe that as mobile devices gain importance, consumers are shifting their preferred communication mode from traditional voice call to a combination of voice, video, and messaging services. Today, consumers want access to better Internet capabilities on their mobile devices so that they can share rich multimedia content including live streaming of video and audio services.

Mavenir’s Offerings
Richardson, Texas-based Mavenir (NYSE:MVNR) was founded in 2005 to provide mobile infrastructure solutions. Their software helps telecom carriers manage their bandwidth spectrum more efficiently. Networks are able to allocate spectrum between less intensive data consumption services like voice and SMS to leave bandwidth for more data intensive services like video streaming.

Today, they are a leading provider of software-based telecommunications solutions that enable mobile carriers to deliver Internet protocol-based voice, video, rich communications, and enhanced messaging services to their subscribers globally. Through their Rich Communication Services (RCS), carriers are able to offer features such as group text messaging, file sharing and streaming, and multi-party voice or video calling over existing 2G, 3G, and next generation 4G Long Term Evolution (LTE) networks.

Gartner believes that the worldwide spending on 4G LTE mobile infrastructure will grow 42% annually over the period 2012 through 2017 to be worth $33.9 billion by 2017. Mavenir is targeting this investment in the 4G LTE segment for their offerings. Not only are their services helping providers leverage existing investments in 2G and 3G, but they are also helping them migrate to 4G LTE networks while maintaining cost efficiencies.

Mavenir’s solutions are deployed by more than 120 mobile networks worldwide and their customer list includes AT&T, T-Mobile USA, Vodafone, Tele2, Deutsche Telekom AK, and Telstra. Their products helped deliver the industry’s first deployment of Voice over LTE by MetroPCS to their subscribers.

Mavenir’s Financials
Mavenir has seen strong revenue growth in the recent years. Their revenue grew from $49.5 million in 2011 to $73.8 million in 2012. However, they continue to make losses. Losses in 2012 narrowed from $21.8 million a year ago to $15.6 million.

They recently reported their fourth quarter results for fiscal 2013. Revenue in the quarter grew 62% to $27.1 million with losses narrowing down to $2.8 million compared with loss of $6.5 million a year ago. Mavenir ended the year with revenue of $101.3 million, up 37% over the year and losses down from $15.6 million to $15.3 million.

Till recently, Mavenir was venture funded with $105 million in funding from Austin Ventures, North Bridge Venture Partners, Alloy Ventures, Greenspring Associates, Cisco, August Capital, and Cross Creek Advisors. Last November, Mavenir went public on the NYSE under the ticker MVNR and sold 5.5 million shares at a list price of $10 each to raise $55 million. Mavenir plans to use these funds for international expansion and is eyeing the emerging markets of Latin America and China.

Mavenir’s stock is trading at $16.55 with a market capitalization of $387.6 million. It touched a high of $18.35 earlier this month after recovering from a low of $8.50 that it had fallen to soon after listing.

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