On Friday, the makers of hi-tech wireless speakers, Sonos Inc., filed for an initial public offering. The move comes in the wake of increased popularity of using Smartphone apps to stream music on connected audio systems.
With the support of KKR Stream Holdings LLS, Sonos has risen to one of the biggest players in the home audio market that features stiff competition. The company has even battled established industry players such as Sony, iPhone maker Apple, Bose and Bang & Olufsen.
However, the company did not provide further details concerning the size of its offering but indicated that the escalating trade tensions between the United States and China could hurt their business. The two countries have been imposing counter-tariffs against goods coming from either country.
In the filing, the company said that if there was imposition of more tariffs on a wider range of imports, the company may be compelled to raise its prices. That could translate to loss of customers as well as ruined reputation and operating performance.
Sonos speakers has managed to attract audiophiles across the globe with its tie-ups that has about 100 music streaming providers which include Pandora, Spotify, Apple Music and TuneIn.
Sonos Inc was founded in 2002 and has lately launched voice-controlled speakers that are integrated with Amazon’s Alexa technology. The introduction places them in direct competition with the Siri powerered, Apple’s HomePod speakers.
The speedy advancement in streaming music services in the current world has contributed to a significant recovery in the global recorded music industry fortunes as well as a high demand for internet-connected speakers. Products of Sonos are disseminated in over fifty countries and in fiscal 2017, 55% of the total revenue came from outside the United States.
While indicating the size of the IPO, The Company fixed a placeholder amount of $100 million. Moreover, according to some reports, the company is also targeting a valuation that ranges between $2.5 billion and $3 billion.
Ordinarily, the amount of money that a firm says it intends to gain in its first IPO filings is used for the calculation of registration fees. However, there could be a difference in the final size of the IPO.
In 2017, the company reported revenue of about $1 billion which was a 10 percent rise from the year earlier. Additionally, the net loss reduced to $14.22 million from $38.21 million in 2016.
A California-based company, the Santa Barbara indicated that it aims to list on the Nasdaq Global Select Market under the “SONO” symbol.