Morrisville’s MaxPoint files plans for IPO

MaxPoint Interactive

MaxPoint Interactive, a Morrisville digital marketing company, has filed plans to raise as much as $75 million in an initial public offering of stock.

The company, founded in 2007, has been among the fastest growing Triangle technology companies in recent years, with its revenue increasing 350 percent between 2011 and 2013, according to its filing with the Securities and Exchange Commission.

MaxPoint reported revenue of $67.8 million for the first nine months of 2014, a 62 percent increase over the same period in 2013.

MaxPoint’s founder and CEO Joseph Epperson is a former eBay executive. He didn’t return a call seeking comment Tuesday.

The company offers software that uses the power of “big data” to help companies target consumers online who live in neighborhoods with certain attractive demographics. MaxPoint collects billions of data points from brick-and-mortar stores and online and social media to identify neighborhoods that are fertile grounds for a particular product or service. It has created the digital equivalent of ZIP codes by dividing the nation into 44,000 neighborhoods, which it calls Digital Zips.

The company sells its software as a service either directly to customers or through advertising agencies acting on behalf of those customers. A “substantial majority” of the company’s revenue comes through advertising agencies, according to MaxPoint’s SEC filing, and the company says it has worked with the top 20 national advertisers and the top 10 advertising agencies in the U.S.

As of Sept. 30, the company had 431 separate customers from which it generated $10,000 or more in revenue over the past 12 months.

MaxPoint has been adding staff rapidly. It had 286 employees in the U.S. and five in the United Kingdom as of Sept. 30, up from 155 employees during the same period in 2013.

Despite its revenue growth, MaxPoint has posted net losses dating back to 2011. The company reported a net loss of $11.5 million for the first nine months of 2014, and reported debt of $27.4 million.

“Our advertising expenses have increased with our revenue growth, and we expect our traffic acquisition costs and operating expenses to continue to increase substantially as we expand our business …,” the company wrote in its filing.

Another risk cited by the company in its filing is that it does not have long-term commitments from its customers. MaxPoint notes that it is “relatively easy for our customers or the advertising agencies acting on their behalf to seek alternative providers of digital marketing solutions, as there are no significant switching costs.”

MaxPoint has raised $25.5 million to date from the sale of stock to third parties. Among the company’s shareholders are Trinity Ventures and Madrona Venture Funds. The company plans to use the proceeds from an IPO for general business purposes, including sales and marketing activities as well as possible acquisitions.

MaxPoint hasn’t yet disclosed how much stock it plans to sell. It is hoping to have its shares traded on the New York Stock Exchange under the ticker “MXPT.”