The global trade management solutions provider Amber Road went public on the New York Stock Exchange on Friday.
The initial public offering includes 20,948,384 shares of common stock, with the company saying it hopes to raise $75 million and net roughly $48 million, with proceeds going to working capital and to fund potential acquisitions.
Amber Road provides cloud-based software-as-a-service (SaaS) solutions for trade compliance, transportation management and supply chain visibility. Its major competitors on the trade compliance software side include enterprise software providers Oracle and SAP, as well as niche providers like Integration Point and QuestaWeb, and Kewill.
Amber Road’s revenue in 2013 was $52.5 million, up 21.2 percent year-over-year, while it had a net loss of $14.4 million in 2013, compared to a $2.1 million loss in 2012, according to the company’s prospectus
Subscription revenue accounts for nearly three-quarters of Amber Road’s income, with professional services making up the rest. One customer accounted for 11.5 percent of Amber Road's revenue in 2013, while 11 percent of the company's revenue was derived from international customers.
The company said 54 percent of its workforce is dedicated to solution development, but that it might seek out acquisitions of “local GTM software companies in order to obtain sales teams with a track record of success in their markets” as well as companies that “may have best-of-breed solutions to specific problems, particularly those created by the unique trading requirements of foreign countries.”
Its notable recent acquisition was of China-based GTM solutions provider EasyCargo, a deal completed in the fall.
Amber Road is noted for its deep trade content capabilities, a critical differentiator in a fragmented GTM solutions market. This content allows users to plug in to even the most basic solution Amber Road offers and access continuously updated information regarding crucial trade compliance issues like restricted party screening and classification.
Analysts suggest that Amber Road's revenue growth is solid, but needs to improve to attract investors, and that it faces stiff competition in its market from the well-financed and well-known likes of Oracle and SAP. The GTM niche providers, meanwhile, might not have the solutions breadth or depth of Amber Road, but might have more attractive pricing models.