The army of venture capitalists who’ve been pumping millions of dollars into locally based Angie’s List aren’t ready to pull the trigger on an exit strategy just yet.
The fast-growing, consumer-ratings firm said in late September that it had attracted another $22.5 million in equity financing—money that will fuel the company’s continued explosive growth.
The 400-employee firm closed 2009 with $46 million in revenue, up from $34 million a year earlier. It now offers its consumer review and rating service in 200 markets, up from just 30 four years ago.
The privately held firm has been gobbling up venture capital since 2005. The latest round includes an additional infusion by Boston-based Battery Ventures, an investor since 2008. Among the new investors is the Salt Lake City-based Wasatch mutual fund family.
Venture capitals often seek to reap riches after only a few years, often by selling the business or taking it public. And Angie’s List’s namesake and chief marketing officer, Angie Hicks, told IBJ “we consider all” exit options.
But now isn’t the time.
“Acquisition, IPO—any of them are certainly possible,” she said. “But at this point, we are just focused on growing the business because there is so much potential.”
The 15-year-old company now has raised nearly $100 million in debt and equity financing and backing from individuals. One of the firm’s big investors is Boston-based Aquent, a staffing firm whose CEO, John Chuang, met Bill Oesterle, Angie’s List’s CEO, when the pair were Harvard students pursuing their MBAs.
Angie’s List is focusing on three main avenues for growth—expanding its core rating business, its health-and-wellness consumer reviews and its “The Big Deal” group coupon service.
The company offers “The Big Deal” in more than 30 markets and plans to offer it in more than 50 by the end of the year. Participants receive coupons for steep discounts, with Angie’s List members receiving the deepest price cut. A current offer provides members $250 in window cleaning for $115. Angie’s List keeps a percentage of each sale.
Meanwhile, expansion into new markets continues apace. Angie’s List this year launched in its first two markets outside the United States—Vancouver and Toronto. It plans to expand throughout Canada before heading to London and other European cities.
The company finds competition wherever it goes—often in the form of web services like Yelp, which allow consumers to share the experiences they had with local businesses.
But such services can be a free-for-all, with posters hiding behind anonymity or pseudonyms. Angie’s List accepts reviews only from its members, who pay about $30 annually in established markets like Indianapolis.
“Angie’s List positioned itself as the premium player in the review space because of the integrity of our reviews,” Hicks said. “We don’t allow anonymous reviewing. As you look out across the Internet, it’s very rare that you can’t review anonymously.”
Rokita attack spawned fight
When Indiana Secretary of State Todd Rokita charged on Sept. 13 that the Indiana State Teachers Association was making campaign contributions at the same time it owed school districts $23 million, union representatives leapt into action.
For starters, they argued the campaign money came from its members—not its own coffers—and therefore had nothing to do with obligations to districts stemming from the collapse of the union’s health insurance plan.
Records show they also raced to court to try to reschedule a Sept. 24 deposition of Rokita, whose office is suing the ISTA over the failed plan, arguing he would use the deposition to gather fodder for his campaign for Congress. ISTA attorneys argued he’d already twisted the truth in his Sept. 13 attack.
The union alleged there were “clear indications that allowing the deposition to be taken at this time will result in abuse of the discovery process for improper political purposes.” It asked that the deposition be rescheduled until after the Nov. 2 election.
But in a ruling Sept. 24, Magistrate Judge Tim Baker was unsympathetic. He quoted a line from one of ISTA’s own filings saying, “This is all much ado about nothing.”
“On that point, the court agrees,” Baker wrote. He said ISTA originally had suggested Sept. 24 for the deposition and had failed to cite a case where a judge had rescheduled a deposition under similar circumstances. He wrote that the ISTA failed to establish that Rokita’s “underlying motive is to grab headlines” for his campaign.
It’s unlikely that Rokita, a Republican, would need the political boost, anyway. He’s considered a shoo-in to succeed Rep. Steve Buyer, who is not seeking re-election in the heavily Republican 4th District.•