Angie’s List Inc., a web service that provides consumer reviews to 1.5 million members, may decide to opt for an initial public offering as early as this year, CEO Bill Oesterle said.
The company last year hired Code Advisors, which has provided advice on previous funding and would help Angie’s list choose bankers in the case of an IPO. Code is also advising on potential opportunities to sell the site, Oesterle said. Angie’s List has rebuffed expressions of interest from prospective buyers, which were public companies, he said.
Angie’s list named Keith Krach as chairman and Robert Millard as chief financial officer earlier on Wednesday, appointments that may also presage plans for an IPO. A public share sale would help the Indianapolis-based startup raise money to pursue faster growth in the competitive consumer-reviews and daily-deals markets, where rivals include Facebook Inc., Groupon Inc. and Google Inc.
“We are certainly reaching a size, and have opportunities in front of us that are causing us to consider very seriously a public offering,” Oesterle said in a telephone interview. “We could make that decision this year.” IPO funds could be used to boost advertising on TV and radio, he said.
Angie’s list doesn’t formally disclose financial details. Oesterle said revenue rose 40 percent in 2010, and should increase at a faster pace this year. The company expects to end the year with 1.8 million members, up from 1.2 million at the beginning of the year, he said.
Founded in 1995 by Angie Hicks and Oesterle, Angie’s List provides ratings and reviews for more than 500 types of businesses.
Krach, a Purdue University graduate, is CEO of 3Points LLC, an investment holding company based in Los Gatos, Calif. He also is chairman of San Francisco-based DocuSign Corp. and of the Purdue University Board of Trustees.
Krach co-founded software giant Ariba Inc. in 1996 and served as CEO, taking the company public in 1999 and achieving market capitalization of $34 billion.
He earned a degree in industrial engineering from Purdue and an MBA from Harvard University.
Millard previously served as CFO at FinishMaster Inc., an Indianapolis-based national distributor of automotive coatings that was sold in January to Uni-Select Inc. Prior to that, Millard was CFO at Personnel Management Inc., a public company in Greenwood that was sold to a private equity firm.
“The goal is to accelerate the tremendous business momentum that Angie’s List already has,” Krach said in an interview. “At some point in the future, I am sure there will be an IPO, in the intermediate future.”
Pre-IPO companies often beef up management to add financial expertise and executives with experience taking businesses public.
“This is all according to the IPO playbook,” said Tom Taulli, an independent IPO analyst, said. “In order to go public, you need a strong board and a CFO who knows how to deal with Wall Street.”
In March, Angie’s List raised $53.6 million in a private share offering from investors including mutual-fund company T. Rowe Price Group Inc., which tends to invest in companies that are already public. Last year, Angie’s List said it raised $25 million from investors including venture firms Battery Ventures, Saints Capital, and Wasatch Funds.
The site, which provides recommendations on everything from roofing to medicine, would likely seek to raise $100 million to $200 million, Taulli said, valuing the company at more than $1 billion.