Yandex, Renren.com and HomeAway.com Inc., a trio of Internet startups, are planning to raise a total of $1.8 billion in U.S. initial public offerings this year, people briefed on the proposals said.
Morgan Stanley and Deutsche Bank AG will handle all three deals, which are likely to happen by the end of June, said the people, who asked not to be identified because the plans haven’t been made public. JPMorgan Chase & Co. and Goldman Sachs Group Inc. are also working with HomeAway, while Credit Suisse Group AG will help manage Renren’s IPO, they said.
HomeAway, Renren and Yandex are betting that investors will snap up shares of Internet companies after the worst two-year stretch for IPOs in at least 38 years ended in 2010. Yandex, which plans to raise about $1 billion, may become one of the largest technology IPOs in 2011, along with chipmaker Freescale Semiconductor Inc. Renren, aiming to raise about $500 million, would be one of the first social networks to list shares.
“Now is the time to strike and get out there on the front end of the pent-up demand rather than farther down the pipeline,” said Greg Sterling, an analyst at Opus Research in San Francisco. “The overall economy is better. The Internet is an area where there’s growth. This is one of the few sectors where people are expecting big things still.”
Representatives of Moscow-based Yandex, a search engine, and Renren, the largest social-networking site in China, didn’t respond to requests for comment. Eileen Buesing, a spokeswoman for Austin, Texas-based HomeAway, which lists vacation rentals online, declined to comment. Representatives of Morgan Stanley, Deutsche Bank, JPMorgan, Goldman Sachs and Credit Suisse also declined to comment.
The coming 12 months may become a breakthrough year for technology IPOs, Dick Kramlich, a 42-year veteran of the venture-capital industry, said in an interview last week.
“Over the next 12 months, we’re going to see something we haven’t seen in the last 10 years, which is the evidence of blockbuster IPOs,” said Kramlich, co-founder of New Enterprise Associates in Menlo Park, California.
Internet startups Facebook Inc., Groupon Inc. and Zynga Inc. have reached multibillion-dollar valuations in the private secondary market. The business-networking site LinkedIn Corp., which is valued at $2.5 billion on secondary exchange SharesPost Inc., filed to go public in January. Pandora Media Inc., the biggest Internet-radio company, announced plans for a $100 million IPO this month.
Russian Search Leader
Yandex may file its offering with the U.S. Securities and Exchange Commission in weeks and plans to trade on the Nasdaq Stock Market. Yandex had planned to go public in 2008, but postponed the offering because of the global economic crisis.
Yandex’s websites attracted the largest number of online unique visitors in Russia in August 2010, according to research firm ComScore Inc., placing it ahead of sites from Google Inc. and Microsoft Corp. Websites of Mail.ru Group Ltd., which raised $912 million in a London IPO last November, attracted the country’s second-largest online audience, ComScore said.
In December 2010, Yandex controlled 55.5 percent of the Russian search market, up from 52.4 percent in the year-earlier month, according to ComScore.
Renren.com, meanwhile, has more than 160 million registered users, according to Analysys International in Beijing. The site could use IPO proceeds to step up competition with local rivals Tencent Holdings Ltd. and Baidu Inc. Renren -- a name that means “everyone” in Chinese -- has similar features as Facebook, which is blocked in the country.
At Renren, advertising has more than doubled each year since the site started selling space in 2008, the company said in a statement. The online advertising market will triple to almost $13 billion in China by 2014, estimates Susquehanna International Group LLP.
Renren traces its roots to 2005, when graduates of Tsinghua University in Beijing founded Xiaonei.com, or “Inside School.” That was the year after Mark Zuckerberg, chief executive officer of Facebook, created his service for fellow Harvard University students.
In 2006, Xiaonei was acquired by closely held Oak Pacific Interactive Corp., which renamed the service Renren in 2009. Softbank Corp., Japan’s fastest-growing mobile-phone carrier, is the biggest shareholder in Beijing-based Oak Pacific.
Founded in 2005, HomeAway has gained users and expanded internationally even as vacation-rental rivals such as Airbnb Inc. have emerged. It plans to raise as much as $300 million through an IPO.
HomeAway has received about $500 million in private capital from Austin Ventures, also based in Austin, and Redpoint Ventures in Menlo Park, which first invested in HomeAway in 2005. Redpoint, along with Palo Alto, California-based Technology Crossover Ventures and Institutional Venture Partners, invested $250 million in 2008.
HomeAway has more than 540,000 rental listings in 120 countries, according to its website. Homeowners pay an annual fee of about $300 to list, and the site is free for renters. In addition to HomeAway.com, the company runs Vacation Rentals by Owner, or VRBO.com, and VacationRentals.com.
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