Entries Tagged 'IPO' ↓

VC funding for OSS-related vendors in 2009

The latest report from the 451 Group’s CAOS (commercial adoption of open source) practice is now available, presenting an analysis of venture capital funding for open source software-related vendors in 2009. Some of the key statistics are as follows:

As you can see, VC funding for OSS-related vendors was down considerably in 2009, as predicted. However, the decline was not actually as steep as I or others had predicted, and figures from the National Venture Capital Association and PricewaterhouseCoopers indicate OSS-related vendors fared better in terms of investment compared to software as a whole.

As well as an overview of the statistics from 2009, the reports also includes an update on the trends seen in investment for open source-related vendors since the investment in Cygnus Systems from Greylock Partners and August Capital in 1997.

There’s much more to the report than statistics, of course. It also includes comparison with funding levels from 1997 to 2008, analysis of venture-backed mergers and acquisitions in 2009 involving OSS-related vendors, as well as analysis of the ten largest OSS-related exits to date and the investors that have profited from them.

Also included is an overview of the potential impact of current economic conditions on OSS adoption and investment in OSS-related vendors, and a list of the 74 vendors we believe are most likely to be considering further funding in the next two years.

The report concludes with a look at the current prospects for OSS-related IPOs and (more likely) M&A in 2010, as well as a preview of venture investments in OSS-related vendors in the first quarter of 2010 (look out for a follow-up post about that in the coming days). Stay tuned also for details of the forthcoming webinar.

The latest CAOS report, Open to Investment, 2010 is available here. 451 Group clients with an interest in OSS and venture capital may also be interested in our recent Sector IQ report: Open source M&A in 2010: Will scarcity of later-stage funding lead to more scrap sales?

A decade of open source IPOs

Red Hat is celebrating the 10 year anniversary of its initial public offering. An anniversary to be proud of for Red Hat, but one that has given The VAR Guy pause for thought about the relative success of open source in the past 10 years.

“Would anyone have predicted that no additional open source companies would launch IPOs over the next decade? Ten years without an open source IPO … amazing and somewhat depressing for open source business advocates,” writes the VAR Guy.

It is somewhat depressing that there are not more public open source vendors. However, the statement that there have been no open source IPOs is simply not true. In fact there have been six open source IPOs since Red Hat.

These are covered in detail in our recent CAOS report, Open to Investment, but the edited version is as follows:

VA Linux/VA Software/SourceForge (Nasdaq:LNUX)
The next open source vendor to go public after Red Hat was VA Linux, which was then offering Intel-based servers designed to run Linux. VA Linux became VA Software in December 2001, having moved away from system hardware, and focused its attention on the SourceForge.net development repository and the SourceForge Enterprise development product, as well as media services such as Slashdot, Linux.com and Freshmeat. In 2007, VA Software sold its SourceForge Enterprise Edition software product to CollabNet and changed its name to SourceForge Inc.

Caldera/SCO Group (in Chapter 11)
The last open source vendor to go public before the dot-com bust was Linux distributor Caldera. The company acquired the Unix assets of Santa Cruz Operation in 2000 and changed its name to The SCO Group in 2002. The less said about it after that the better, probably.

Turbolinux (OSE :3777)
Having canceled its IPO in late 2001, Turbolinux eventually found its way to the stock market in September 2005 via an IPO on the Japanese Osaka Securities Exchange. Between those events, the Japanese Linux distributor was owned by Software Research Associates and then Livedoor. Turbolinux’s shares continue to be traded on the Osaka Securities Exchange.

Mandrakesoft/Mandriva (Euronext: FR0004159382)

French Linux distributor Mandrakesoft, which listed its shares on the Euronext Marche Libre in July 2001. Mandrakesoft acquired Brazilian Linux distributor Conectiva in February 2005 and changed its name to Mandriva before purchasing desktop Linux specialist Lycoris in July of the same year.

Trolltech (acquired)
Linux application tools vendor Trolltech made its name with its Qt application development platform and Qtopia mobile device platform. The company made its debut on the Norwegian Oslo Bors in July 2006. In January 2008, it was acquired by Nokia for $153m and renamed Qt Software.

Sourcefire (Nasdaq:FIRE)
Sourcefire, which makes internal security products and sponsors the open source Snort intrusion detection engine, made its debut on the Nasdaq in March 2007, pricing its offering at $15 a share, giving it an opening market capitalization of $350m.

There have admittedly been just a handful of IPOs involving open source vendors. The lack of IPOs is due in part to the relative immaturity of commercial open source business strategies, the attractiveness of open source vendors as acquisition targets (MySQL was on the brink of an IPO when it was acquired) and the fact that the trajectory of these vendors has been impacted by two global economic crises – the dot com bust put pay to the IPOs of Linuxcare and Turbolinux, while there are a couple of vendors that might have been in a position to go public this year or next were it not for the current malaise.

Our CAOS report includes a list of the vendors we think are best positioned for a run at an IPO in the 12-24 months after the downturn ends.

The past, present, and future of VC investment in open source

Yesterday The 451 Group published Open to Investment, the latest CAOS research report, which examines the past, present and future of venture capital investment in open source-related vendors.

The report contains analysis of the history of venture funding in open-source-related firms between 1997 and 2008, based on The 451 Group’s database of more than 370 funding deals.

It also contains results from a survey of investors from private investment firms, assessing their sentiment toward open source and the likely impact of economic conditions on investment in these vendors.

Among the key findings:

  • Since the first venture investment in an open source vendor in 1997, $3.2bn has been raised by 163 open source vendors through 378 separate funding deals.

  • The report identifies 57 vendors that are most likely to be considering further funding in the next two years based on the length of time since their last funding round and the total raised to date.
  • Private investors anticipate that current global financial conditions will accelerate the adoption of open source software in 2009 and 2010 and, given that, they are more inclined to make investments in 2009.
  • However, a 100% open source software-licensing strategy is incompatible with the demands and requirements of private investors.

Depending on your perspective that last finding will likely seem blindingly obvious or highly controversial. What we found is that while the investors we spoke to were much more likely to invest in open source-related vendors than proprietary vendors in the current climate, they preferred vendors that take a hybrid approach to software development and licensing.

We also asked investors to choose from between five different licensing strategies for an imaginary startup (hybrid open source/proprietary, hybrid open source/SaaS, hybrid proprietary/SaaS, 100% proprietary, and 100% open source). Not one investor was more likely to invest in a vendor with 100% open source licensing.

The report also covers:

  • The likely impact of economic conditions on open source adoption.

  • The prospects for M&A involving open source vendors in 2009.
  • The seven vendors we think might be best positioned for a run at an IPO in the 12-24 months after the downturn ends.
  • A high level view of investment trends between 1997 and 2008.
  • The primary benefits of open source, from the perspective of investors.
  • The major risks of open source, from the perspective of investors.
  • Why private investment isn’t always the answer.
  • Detailed analysis of investment in each year between 1997 and 2008.

  • Exit strategies: the history of IPOs, M&A and failed businesses.
  • The most prolific investors.
  • The biggest fundraisers.

The report is expected to form the basis of an annual repeatable service from The 451 Group designed to examine the levels of investment in open source vendors and to identify the changing attitudes among private investors. We will also continue to offer quarterly updates based on preliminary figures on 451 CAOS Theory.

Also look out for details of the a forthcoming webinar, during which we will discuss the findings and research report in more detail.

Open source: assimilate and thrive

Matt Asay writes today about the prospects for open source vendors going public or, more likely, being acquired, and wonders whether open source vendors should “hold out for an IPO” or “capitulate” and be acquired.

The latter seems far more likely, especially in the current economic climate. We have written before about the open source vendors most likely to go public in the next couple of years.

Looking at the list of contenders again it is easy to imagine that they could all be snapped up before they make it public thanks to the fact that 1) open source vendors are very attractive investments 2) it is difficult for open source vendors to build the momentum to do so.

I spoke recently with Bernard Dallé at Index Ventures, which has previously invested in the likes of MySQL and Trolltech.

Bernard made the point that while the open source distribution/subscription model is a great way of reaching potential new customers and generating predictable revenue, revenue is on average three times lower than a traditional licensing approach. The result is that it takes more time to build the momentum required to go public.

I previously wrote that for open source vendors patience is a virtue, noting that it took MySQL 12 years to grow to the a position where it was preparing to go public – and even it couldn’t avoid the lure of Sun’s lucre. The open source vendors that have followed MySQL’s example barely get the chance to build a meaningful revenue stream.

There is also the issue that the pure play open source vendors like Red Hat do not have the financial clout to compete with the likes of IBM and Sun and Oracle when it comes to potential acquisitions. You can read a little more about our view on that here.

In his take Matt writes that “I’m coming around to the idea that everything will be a blend of open source and proprietary software or services, at least for the foreseeable future.”

I can’t go in to too much detail but I’m doing some research on this right now and the fact is that the future is now. There is very little money being made out of open source software that doesn’t involve proprietary software and services.

Which is not to say that open source won’t survive and thrive, but if you’re waiting to see pure play open source vendors replace the current crop of industry giants you’re going to be waiting a long time.

Why MySQL sold out

It’s good to see MySQL’s CEO, Marten Mickos, explaining his reasons for abandoning the company’s IPO in favor of being acquired by Sun. What made him and the open source database company’s top brass change their minds (apart from $1bn)? Mickos lists ten factors that convinced him that Sun was the better option:

“1. Jonathan Schwartz is a brilliant CEO and he has a great team. Who wouldn’t want to work for him?

2. Sun has always had the same focus as MySQL on the networked world. Focus and alignment!

3. Sun has become the world’s strongest proponent of free and open source software. We are happy to be part of that!

4. Sun has changed its strategy to include partnerships with former competitors. Hey, coopetition is what we always did!

5. Sun has never stopped innovating or stopped investing in technology. Impressive!

6. Sun has a huge field operation that can bring MySQL to more customers faster. Thank you!

7. MySQL would be a great complementary fit in Sun’s product portfolio. We like being useful! We love being uniquely useful!

8. Sun’s corporate culture is among the best a startup can ask for. We can work from home! We can innovate. We are thrilled!

9. Sun is a bold and fun disruptor again, and we see a huge upside in its strategy. I am not saying that success is a given, but I am saying that Sun’s new strategy is one of the most exciting this industry has to offer. We are all in!

10. Sun was really eager to get us on board and we were treated with the greatest respect from the start. (And I hope we did the same in return)”

One of the things I like about Marten is that despite his enthusiasm and excitement he is at heart a realist. As he puts it “in a typical Scandinavian contrarian way: Perhaps we will be unable to maintain our passion within Sun. And at the most extreme, perhaps we should not have done this deal. The reality is it will take many years before we can judge this decision to know if it was the right course.”

You just don’t hear US executives talking like this. “But let me also state that there is probably no better place for this ‘dirty dozen’ (or perhaps ‘fanatical four hundred’) of MySQL than inside Sun Microsystems,” he adds, getting back on message.

It’s an interesting article and no doubt answers a few questions people will have been asking about MySQL’s decision. Read it over at AlwaysOn.

Coincidentally, Jonathan Schwartz has gone on record this week about the factors that convinced him that acquiring MySQL was the best user of $1bn of Sun’s money. “Sun was attracted to the open-source database company’s very rapid growth rate and its revenue model,” reported InforWorld following his keynote at SugarCRM’s SugarCon 2008 conference.

The report adds: “‘What was attractive was how profound their distribution was,’ Schwartz said. MySQL offers access to about 11 million deployments around the world, and Sun began to see MySQL delivering real value, innovation, and choice, he said. MySQL sells services and support for its database. Asked if Sun planned to scale the MySQL database to compete with Oracle, Schwartz said Sun will not compete with Oracle but ‘will scale MySQL to extraordinary heights’.”

Open source IPOs – take two

Earlier this month I took a look at Fortune’s tips for initial public offerings in 2008 and passed comment on the open source-related contenders. Given the events of the past ten days or so it is worth taking another look at the open source vendors that might make IPO candidates between now and the turn of the decade.

Once again I should note that I have no knowledge of the IPO plans of these companies beyond that which is presented below, and the assessment of their potential is my own.

Ingres

Ingres has confirmed that it intends to file for IPO in 2008. It had expected to follow MySQL, but will now be the first open source database vendor to IPO after MySQL acquisition by Sun. Ingres says revenue grew 100% from more than $25m in 2006 to more than $50m in 2007. The majority of Ingres’s shares are owned by Garnett & Helfrich Capital, which financed the spin-off from systems management vendor CA in 2005. CA remains a customer although Ingres maintains that no customer accounts for more than 10% of its revenue, and that CA is well below that figure.

SugarCRM

Like Ingres, the open source CRM vendor was on Fortune’s list of likely IPOs in 2008. CEO John Roberts told News.com in August that it intended to file within two years. I previously commented that, with $14.5m of a $20m Series D funding round in the bank, any offering would likely be later rather than sooner. A recent article at MSPmentor reiterates that an offering is likely at some point in the next two years. Revenue for 2007 was expected to double to $15m, according to Reuters. Total funding to date: $41m.

Alfresco

The UK-based enterprise content management vendor just raised $9m in Series C funding, even though it didn’t need the cash, according to Matt Asay. Meanwhile, according to VentureBeat, CEO John Powell said the company is about to hit an annual run rate of $10 million in revenue and the company will “be able to go public in 2009.” Total funding to date is $19m.

Fonality

“Today we’re on a straight line to an IPO. Ask me in a couple of quarters,” said Fonality CEO Chris Lyman when asked about the company’s exit strategy in June 2007. A couple of quarters have now passed, so what about it Chris? The open source VoIP and communications provider has raised just over $12m from Azure Capital, Intel Capital and individual investors.

Greenplum

Greenplum yesterday said it has raised $27m in Series C financing following “$15 million Series B financing” in February 2007. 451 CAOS Theory figures suggest it has raised over $72m in five different funding rounds however, both as Greenplum and its former incarnation, Metapa. Sooner or later one of its many backers is going to start looking for some pay back. Dawntreader Ventures (and its predecessor SoundView) had been with Greenplum/Metapa right up to the latest funding round. The company said it grew its customer base by over 300% and saw a 10x increase in revenue in 2007, so the performance is also strong. Given its partnership with Sun, Greenplum would make an interesting addition to Sun’s portfolio and it is no surprise to see Sun investing in the company.

Of course the potential of any open source IPOs at all in the next couple of years will be dependent on market conditions, as well as the increased M&A activity.

Today’s the day for open source venture funding

“2008 is starting with a bang for open source,” wrote Mark Radcliffe last week, and he’s not wrong. Not only did we see Sun’s $1bn acquisition of MySQL, but we’ve also seen an extraordinary amount of venture capital funding. Today saw no fewer than three investments announced, with Greenplum landing $27m Series C, Zenoss closing a $11m Series B round, and Alfresco announcing a $9m Series C round.

According to 451 CAOS Theory figures $80.5m worth of open source VC funding has been announced in the first 22 days of 2008, compared with $100.4m in the whole of the first quarter of 2007. It’s an extraordinary turnaround after a dismal fourth quarter of 2008, and helps to explain why the funding level for the last quarter was so low. Clearly a few vendors were waiting until the New Year to make their announcements.

For the record, 2008’s open source funding deals break down as follows:

  • Greenplum’s $27m from Meritech Capital Partners, Sun Microsystems, SAP Ventures
  • Zenoss’s $11m from Grotech Capital Group, Intersouth Partners, Boulder Ventures, and the Maryland Department of Business and Economic Development.
  • Alfresco’s $9m from SAP Ventures, Accel Partners and Mayfield Fund.
  • Engine Yard’s $3.5m Series A from Benchmark.
  • Openads’ $15.5m Series B from Accel Partners, Index Ventures, First Round Capital, Mangrove Capital Partners and O’Reilly AlphaTech Ventures.
  • SugarCRM’s $14.5m Series D from Draper Fisher Jurvetson, New Enterprise Associates and Walden International.
  • Additionally, First International Computer said it was providing capital for the spun-off OpenMoko.

It’s interesting, incidentally, to see SAP Ventures involved in both the Greenplum and Alfresco deals, while Sun’s investment in the PostgreSQL-based Greenplum in part backs up its commitment to the open source database project following its acquisition of MySQL. Sun was already a Greenplum partner.

The level of funding so far in 2008 also explains why some in the industry are still buoyant about open source investment levels despite the 40% drop in funding noted in 2007. So does the level of activity so far this year suggest we’ll see a significant revival in 2008? Personally I think the level of funding will even itself out over the year, but we’ll see perhaps a slight increase over 2007.

(Then again, it’s just possible, as Matt Asay notes, that open source vendors are getting their funding in now before the downturn hits).

Another potentially good sign for open source investment came from Index Ventures’ announcement that it has closed the400m ($529m) million Index Ventures Growth I L.P fund, “formed to address the market opportunity created by the maturation of Europe’s start-up industry and the movement of traditional late-stage investors into larger deal sizes in both the technology and life science sectors.”

Index has previously been a big supporter of open source, and should be inclined towards further investment seeing as it just got a big fat pay-out from the MySQL deal. Additionally Scale Venture Partners, which is a JasperSoft investor, has declared its intention to do more open source deals.

Meanwhile, 451 CAOS Theory is aware of at least one further open source funding deal for which announcement is imminent. Also, while Sun’s acquisition of MySQL denied the industry one open source IPO this year, we should still expect to see at least one public offering before the year is out.

It’s going to be an interesting year.

Here come the open source IPOs

Fortune magazine has published a list of its hot IPO tips for 2008. Three out of the five – MySQL, Ingres and SugarCRM – are open source companies, while another – Parallels – is an open source project sponsor (for the record, the other Fortune tip is ExactTarget). Here’s a look at Fortune’s assessment of the four open source-related vendors, together with a quick 451 CAOS Theory view, and a terrible pun.

I should probably state for the record that I have no knowledge of the IPO plans of these companies beyond that which is presented below, and the assessment of their potential is my own.

MySQL

Fortune says: “One of the most anticipated tech IPOs of the coming year, MySQL is the leading open-source database company on the planet. Its software might not have the bells and whistles of Oracle 11, but it also comes at a much cheaper price. According to the venture capitalist lunch chatter, MySQL is expected to file very soon.”

CAOS Theory says: MySQL has been talking up its IPO credentials for some time, and a 2008 offering was always more likely than 2007. The plan has not changed as far as The 451 Group is aware. What has changed is that the company has stopped being so open about its financial performance, which is typical of a company preparing to go public. Previously the company publicly claimed revenue of $50m in 2006 and $34m in 2005. Expect an IPO sooner rather than later.

Ingres

Fortune says: “From 30,000 feet Ingres looks like a competitor to MySQL, but actually focuses on another part of the database food chain that is more competitive with Oracle. Another open source company, it has the heft, approaching $100 million in revenue and is cash flow positive. It is widely expected to file for a public offering by mid-year.”

CAOS Theory says: Like most private companies, Ingres does not talk publicly about its financial performance, but we expect that situation to change as it provides more information for comparative purposes as MySQL’s figures become public via the SEC. Is Ingres “approaching $100 million in revenue”? It is certainly heading in the right direction with 100% growth in new business and 70% year over year growth in total bookings in the 12 months ending July 2007. Even though, as Fortune states, Ingres is a very different business from MySQL, whether it is likely to go public as soon as mid-year would very much depend on MySQL’s IPO performance, in my opinion.

SugarCRM

Fortune says: “Yet another open-source company, it offers, as its name suggests, software for customer relationship management, things like sales force automation and customer support. It is also on-demand. Think of it as an open-source version of SalesForce.com. The word is that it is cash flow positive.”

CAOS Theory says: SugarCRM began talking up its IPO prospects in August last year, with CEO John Roberts telling News.com the company intended to go public within two years. Revenue for 2007 was expected to double to $15m, according to Reuters, and revenue targets were set at $25m and $100m, according to The VAR Guy. However, the company also just raised $14.5m of a $20m Series D funding round, leaving one of its own advisers confused. That deal suggests talk of a IPO this year is premature.

Parallels

Fortune says: “The virtualization technology company has more than doubled revenues every year for the past eight years, so it’s got the track record. And its products are giving VMware a run, especially in the small- and medium-business marketplace. Just find someone who uses Parallels and they will not stop gushing about it. Given VMware’s successful IPO, you can bet the SWsoft executive team and their investors including Intel Capital, Bessemer Venture Partners and Insight Venture Partners are looking hard at their IPO options in 2008.”

CAOS Theory says: Given VMware’s successful IPO it was inevitable that the company formerly known as SWsoft would be tipped to follow its virtualization rival public. Indeed the name change announcement certainly got tongues wagging. However, the company has also been talking about an IPO since 2005, and it faces a number of distractions this year. Not only is the company in the midst of a corporate re-branding it is also repositioning itself as a cross-product virtualization management provider, and is digesting three separate acquisitions. Under those circumstances it would take a brave company to also push for an IPO. But then I guess you could say Fortune favors the brave. (Sorry).

Mozilla: going public or public asset?

Henry Blodget is a name I haven’t heard in a while. The former securities analyst, who is banned from the securities industry for life following allegations of fraud, has returned to the headlines this week with his suggestion that the Mozilla Foundation could and should file for IPO this year or next.

Blodget’s theory has been dismissed by Mozilla COO John Lilly as well as the likes of Larry Dignan and Glyn Moody. Lilly best sums it up with the following statement: “We’ve said this before on the record and we’ll reiterate categorically that there’s no intent or desire to do a public offering, no plans to do so, and an overwhelming sentiment here that to do something like this would fundamentally undermine what Mozilla is about.”

Although Blodget’s analysis and calculations make a potential IPO sound attractive (“a business this exciting would probably trade for at least 30X-50X current profits, which would put you at $1.5 billion to $4 billion using the mid-point of the multiple range”) you have to start with the fact that he did not even use the publicly stated accounts to come up with that valuation.

Blodget admits this himself in his follow-up. Even though the actual results support his earlier calculations, this lack of attention to detail is indicative of a fundamental misunderstanding of how and why the Mozilla organization works. As Lilly suggests and Mozilla CEO, Mitchell Baker, has previously expained Mozilla has been successful because it has avoided the distractions of shareholders and investors and been able to focus on the needs of developers and users.

“Firefox is a great product because thousands and thousands of people care about it, and contribute to making it better,” wrote Baker back in August last year. Would the same people contribute to Firefox if it were the product of a for-profit organization? Granted, it happens with other open source vendors, but they have radically different structures that are specifically designed to balance the different needs of shareholders and the community.

The Mozilla Foundation simply isn’t structured to support a public company. “Firefox is created by a public process as a public asset. Participants are correct to feel that Firefox belongs to them. They are correct legally, since the Mozilla Foundation’s assets are legally dedicated to the public benefit. They are correct practically because Firefox could not exist without the community; the two are completely intertwined,” added Mitchell.

There are also good financial reasons why Mozilla would be unlikely to flourish as a public company, not least the fact that over 85% of its revenue in 2006 came from a single source: Google. That contract is due to expire in November 2008. While there is no suggestion that the contract will not be extended, could a public company survive with that level of risk?

The organization had cash and equivalents of $13.2m at the end of 2006, with no pressure to invest it or return it to shareholders. As Mozilla’s financial FAQ for 2006 states: “We have significant retained earnings, which allows us a good degree of flexibility… First, the cash reserve is of course a form of insurance against the loss of income. We will continue to maintain enough of a reserve to allow us flexibility in making product decisions.”

Mozilla also plans to spend its money on people and infrastructure, new development programs, and grant and grant-like initiatives that are fundamental to its stated aim that the Internet is a public resource that should be open and accessible to all. Supporting the public resource as a public company would not be impossible, but it would be a lot more difficult.

As Lilly noted in a response to Blodget’s follow-up: “pursuit of these goals is best achieved as an independent company, with no shareholders who would conceivably want to focus on short-term (or even long-term) profits instead of the public benefit mission.”

There will be plenty of open source IPOs in the years to come from companies that have been set up to balance the needs of a public company and a public development model. Just don’t expect Mozilla to be one of them.

Sourcefire files for IPO

Sourcefire, Inc., founded by Snort creator Marty Roesch, has filed a registration statement with the Securities and Exchange Commission to go public. The Columbia, Maryland-based company says in the filing that 2005 revenues rose 97%, to $32.9m from $16.7m. For the nine months ended September 30, 2006 revenues increased 36%, to $28.9m from $21.2m over the nine months ending September 30, 2005. Sourcefire says that of 83% of its revenue derived from North America.

With the $20m in late stage funding it took this May, Sourcefire’s external funding totaled $53.65m. In March it said it was on pace for a run rate of more than $50m in 2006; third-quarter sales may yet bring it to that figure – though we note that when the Check Point acquisition of Sourcefire tanked early this year, Check Point said that it had expected Sourcefire to contribute $40m for the full year of 2006.

Open and public

Trolltech, an open source company focused on the cross-platform and mobile development tools space, had its initial public offering today on the Oslo Stock Exchange (OSE: TROLL) today. Shares were offered at 16 NOK (Norwegian Kroner), which is approximately $2.57 US, and closed on its first day slightly up at 17.50 NDK, approximately $2.81 US. You can check out the press release. The press release is in English, although my link to the Oslo Stock Exchange is in Norwegian. However, the numbers on the OSE page should be somewhat easy to discern. I don’t have a translation URL for you, as the ones I tried didn’t work very well.

While I’m on the topic of public open source companies, I should mention that Red Hat announced its quarterly earnings last week (press release). Shares have been down a bit since the earnings announcement as the results were below some analyst estimates. Also, the acquisition of JBoss had a greater impact on the dilution of their earnings than previously expected.

Watching Red Hat has always been interesting because it’s really the only public company with an entirely open source focused business model. I guess we can now add Trolltech to this list, although it’s not on the US markets. Other public companies have open source plays, but only as part of their overall business.

Matt Asay recently mentioned a research note from JMP Securities on his blog entry, “The Walking Dead“. One of the excerpts that Matt shared from the JMP Securities piece was a chart entitled “Open Source Revenues Relative to Valuation”, which looked at eleven public companies and the contribution that open source business contributed to overall revenues. However, only two of the companies listed had more than a single-digit percentage of their revenues derived from open source activities – Red Hat and VA Software.

Someday I hope to put together an “open source fund” tracking the various public open source companies and other public companies with a significant open source aspect to their business. The data in the JMP Securities graph could form the basis for an open source fund, whereby the calculation of the fund total followed the open source contribution to revenue as a percentage of the stock price per company. But, to do this right we need a few more IPOs (or major business shifts). I wonder who will go public next.