File-sharing company Egnyte expects profit next year, eyes 2015 IPO

Reuters News
Posted: Oct 08, 2013 1:08 PM

By Sruthi Ramakrishnan

(Reuters) - Online file-sharing service provider Egnyte, whose products include a program that helps companies prevent snooping by the U.S. government, expects to become profitable from the third quarter of next year ahead of a possible IPO in 2015.

Chief Executive Vineet Jain, who co-founded Egnyte in 2007, said Egnyte signed up more than 500 customers within four days of the launch last month of a program that keeps data out of reach of the National Security Agency's Prism program.

"These are mid-market to large enterprises, not your SMB (small and medium business) class of customers," Jain said in an interview.

Egnyte's anti-Prism product allows customers to remotely access and share data that is stored behind firewalls on the customer's premises.

Data stored this way is less vulnerable to snooping than data that is stored online. It also frees Egnyte of the obligation to turn over customer data in case of a subpoena from federal authorities, Jain said.

Jain said Silicon Valley-based Egnyte, whose more than 30,000 customers include Swedish furniture retailer Ikea, aimed to go public after four or five quarters of profitable growth.

"2014 Q3 is when we turn profitable based on the current projections so I think the stars lining up by 2015 (for an IPO)," Jain said.

"Expectation right now for at least 2014 is that we should be able to more than double up (revenue), and the goal we are driving towards is recognized revenue of $100 million sometime in 2015," Jain said.

Several companies that provide services over the cloud have had successful IPOs this year, including RingCentral Inc, Covisint Corp and Benefitfocus Inc.

Egnyte, which added Google Inc's venture capital arm as an investor in July, said it is in talks to raise about $25 million by November in a new round of funding to help it grow outside North America.

"We absolutely are committed to in early part of next year -late Q1, early Q2 - to actually have physical presence in Europe, most likely in the UK," Jain said. The company plans to expand into the Asia Pacific region the following year.

Egnyte has raised about $33 million to date. Apart from Google Ventures, its investors are Kleiner Perkins Caufield & Byers, Polaris Partners and Floodgate Fund.

Jain said Egnyte had attracted interest from potential buyers, but did not disclose whether any offers had been seriously considered.

"...We are constantly being contacted by companies who are interested in us," Jain said.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Ted Kerr)