ZEDEDA, a provider of Internet of Things (IoT) edge orchestration, expects to raise a Series C round before pursuing an IPO in three to four years, said founder and CEO Said Ouissal.
The round, of undisclosed size, could take place in mid-2024, he added. It will target mid- and late-stage growth investors, said Ouissal.
In an interview with this news service in December 2022, the CEO said ZEDEDA could have raised its Series C earlier but did not need to raise the funds. For the previous report, he said the round would be at least twice as large as the company’s USD 26m Series B.
The company is also in talks with acquisition candidates in North America and in Europe to primarily add skilled teams and eventually some complementary technologies, the CEO said. He said there are many opportunities in the market and targets can have up to 25 employees. Deals would be financed with stock and cash, he said. The company has not made acquisitions before.
Edge computing has become a critical part of a company’s digital transformation journey, the CEO said. ZEDEDA's annual revenue is growing at a rate of 300% and the company is expected to reach the right size for an IPO within three to four years, he explained. He did not disclose current revenue. In an interview with this news service in October 2022, COO Darren Kimura said that at that time the company had annual recurring revenue between USD 5m and USD 10m.
A public listing makes sense for companies with annual recurring revenue of at least USD 100m, the CEO added.
Among the listed companies that could be compared to ZEDEDA are VMware [NYSE:VMW] and Nutanix [NASDAQ:NTNX].
San Jose, California-based ZEDEDA is in talks with some investment banks to evaluate an IPO and understand the next steps, Ouissal said. The company is also interested in hearing from other investment banks with expertise in technology and software as-a-service (SaaS) businesses in sectors such as industrial and energy, he explained.
The company expects to take concrete steps toward an IPO in about 18 months before the offering date, he said.
Since being founded in 2016, ZEDEDA has raised about USD 65m, the CEO said. Its investors include Coast Range Capital, Lux Capital, Energize Ventures, Almaz Capital, Porsche Ventures, Chevron Technology Ventures, Juniper Networks, Rockwell Automation, Samsung Next and EDF North America Ventures.
ZEDEDA has about 100 employees across its locations in the US, Germany and India, the CEO said. The company could reach profitability within 24 months without additional financing, he added.
Ouissal said the company will continue to consider strategic partnerships and investments like the agreement reached in December 2022 with Emerson [NYSE:EMR]. Emerson, a customer, approached ZEDEDA after its Series B, expressing interest in investing in the company. Other customers of ZEDEDA that are also investors are Rockwell, Porsche Ventures and EDF North American Ventures, as reported.
ZEDEDA’s software allows companies to deploy applications at the edge, connecting the edge nodes to the cloud or a corporate data center. The software is powered by artificial intelligence and IoT technology that gives organizations control and visibility of edge data.
Some of the company’s customers such as Emerson and Rockwell have already commercialized products powered by ZEDEDA’s technology, the CEO said. Its customer pipeline is “very strong” and several large customers have contracts for the next five to 10 years, he added.
North America and Europe are ZEDEDA’s current main geographical markets, the next step will be the expansion into Japan and South Korea, Ouissal said.
The company receives legal advice from Paul Hastings.
by Laura Larghi in San Francisco
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