The company’s S-1, which it filed with the U.S. Securities and Exchange Commission on May 2, proposes a $34.5 million cap on the stock offering, though the document isn’t finalized yet. It would trade under the symbol SSTI.
The move comes 21 years after SST’s founding. The company, based in the San Francisco Bay Area, offers a solution that detects gunshots, records details about them and reports them to public safety officials. At the end of March, it counted 74 public safety agencies as customers. That includes some of the largest cities in the nation; San Francisco, New York and Chicago all use ShotSpotter.
It appears that those customers tend to stick with the company — according to the S-1, it retained more than 100 percent of its revenue from existing customers from 2014 to 2016.
Though the company used vague language to describe what it might do with any IPO money it raises, it laid out a nine-point strategy:
Speed up new customer obtainment. Sell more to existing customers. Grow its security business, including train stations and airports. Expand international presence. Integrate more with technologies such as automatic license plate scanners and computer-aided dispatch. Partner with more companies pushing smart city initiatives. Ensure a continuing focus on customer success. Study gunshot data more and invest in improving products and solutions. Pursue company and team acquisitions. The document also reveals the company’s financial details since 2015. It’s heading into the IPO with two consecutive years of net losses — $6.2 million in fiscal year 2015 and $6.9 million in fiscal 2016. The losses came as increasing sales, marketing and research and development costs outpaced its revenue gains.
Of the six public companies on the GT 100 list, at least three — DigitalTown, NIC and Taser (now called Axon) — went into their IPOs with consecutive annual net losses on their books.
Counting revenue, the company has been on a growth run. From fiscal 2015 to fiscal 2016, its net revenue rose 70.9 percent from $3.5 million to $6 million. Net revenues in SST’s most recent quarter were more than double what they were the year prior.
The document also broke down investors’ positions in the company. The single largest backer was venture capitalist Gary Lauder, who has participated in multiple fundraising rounds and holds 37.4 percent of the company’s existing stock.
Other major investors included Motorola Solutions, Claremont Creek Ventures affiliates and RT Groos affiliates, which held 36.9 percent of the company between them. All told, current investors have pumped $70.8 million into SST at an average price of $11.21 per share.