Evernote Corp., an online note-taking and document storage service, plans to hold off on an initial public offering until at least 2015 as it works to convert users of its free product into paid subscribers.
Watching Facebook Inc. lose roughly half its value since an IPO in May has made Evernote Chief Executive Officer Phil Libin want to “stay private as long as we can.” While Evernote’s membership has more than tripled to 38 million over the past year, only about 1.5 million are subscribers paying $5 a month, or $45 a year, Libin said in an interview.
Facebook “reinforces the approach of IPO slowly,” Libin said. “The best time to IPO is when the market is kind of boring.”
In the wake of Facebook’s troubled IPO and concerns over its ability to make money from its 955 million users, Evernote joins Internet startups including Airbnb Inc., LegalZoom.com Inc. and MobiTV Inc. in delaying planned public debuts. After a $70 million funding round in May gave Redwood City, California-based Evernote a $1 billion valuation, Libin said he doesn’t need to rush to the public markets. Waiting longer before an IPO “is the best thing for the company,” he said. “This is the time where we get to have fun and take risks.”
Evernote, like Dropbox Inc. and Box Inc., lets users store their notes, documents, images and other content in the cloud. That means the information is kept in remote data centers, accessible from any Web-connected device. The companies make money by using a so-called freemium model, offering a free version of their products that can be upgraded to a paid membership with more perks.
Technology companies focused on corporate services have fared better in recent IPOs, encouraging Libin to expand beyond his company’s consumer roots to offer more options for businesses. Evernote is introducing a $10 monthly subscription service for small businesses to collaborate on projects and compare notes, Libin said today during a presentation at the Evernote Trunk Conference in San Francisco.
The company’s most popular products include its flagship Evernote program for storing and organizing information, the Evernote Food mobile app for snapping pictures of meals, the Skitch app which takes screenshots an lets users add annotation, and a handwriting app for Apple Inc.’s iPad called Penultimate.
Moleskine Srl, a maker of paper notebooks popular with designers, will include stickers with some products that Evernote users can afix to pages to help digitally organize snapshots taken of images in the book, the companies said today. Evernote’s current software enables users to take pictures and store the images. The sticker will work with new software to let users automatically sort the pictures, Moleskine CEO Arrigo Berni said at the conference.
Libin also unveiled redesigns for the main Evernote applications, designed to make the layout more efficient, that he said will be released in the next few months.
Evernote’s 230 employees moved to a 87,774-square-foot office building off Highway 101 in Redwood City in June. Libin named each conference room after video games, organized alphabetically by floor. It has offices in cities including Beijing, Tokyo, Taipei and Austin, Texas.
About 30 percent of Evernote’s users are from the U.S, followed by the Japan at 20 percent, Libin said. After releasing a version for China earlier this year, Evernote has been adding 60,000 to 70,000 users per day there, the second-highest grower after the U.S., he said. Revenue from Chinese users is low, he said.
“We went into China knowing it was going to be 10 years before we figure things out,” Libin said. “We know that we don’t know what we’re doing in China. So we’re going on an adventure.”