Zoosk files for $100 million IPO

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Zoosk is a dating website that plans to raise $100 million in an initial public offering (IPO) on the New York Stock Exchange with the symbol “ZSK,” according to an S-1 document that was filed with the U.S. Securities and Exchange Commission.

Merrill Lynch, Pierce, Fenner & Smith, and Citigroup Global Markets will be underwriting the IPO. Oppenheimer & Co. and William Blair will be joining as co-managers.

Zoosk claims it has 26 million members, including 650,000 subscribers that pay for additional features and products. The other twenty-five million three hundred fifty thousand are nonpaying registered users.

Zoosk said that the number of members grew from 18 million as of December 31, 2012 to over 26 million as of December 31st, which is 44% growth. The number of subscribers grew from around 483,000 to approximately 650,000.

Zoosk’s revenue grew by 63% from $109.1 million (2012) to $178.2 million (2013). Zoosk reported net losses of $20.7 million (2012) and $2.6 million (2013). Zoosk said that its losses were due to an increase in operating expenses.

“We have incurred net losses in all fiscal years since our inception, including net losses of $12.2 million, $20.7 million and $2.6 million in 2011, 2012 and 2013, respectively. As of December 31, 2013, we had an accumulated deficit of $95.6 million. We anticipate that our operating expenses will increase substantially in the foreseeable future… .” said the company in a filing.

There are risks associated with Zoosk’s user base in terms of the company’s capability to retain and add members and subscribers. There will be challenges with retaining user engagement and subscription levels.

Zoosk launched in 2007 and raised a total of $61.6 million to date.

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