VC-backed NFon aims to raise €50m in Q2 IPO

Oscar Geen
17 April 2018

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VC-backed German cloud telephony service provider NFon has announced its intention to list on the Frankfurt stock exchange.

The company targets gross proceeds of €50m, which will be used to drive penetration and adoption in existing markets, as well as funding further European expansion and continued product development.

The offer comprises a mix of primary and secondary shares with a targeted free float of around 50%. The company anticipates a primary offering of €50m and the sale of a currently undecided amount of ordinary shares by existing shareholders.

More than 99% of the company's current share capital is held by German VC firms. Milestone Venture Capital is the largest shareholder with 35.77%, followed by Earlybird Venture Capital with 34.48%, MIG with 13.29% across two different vehicles, Bayern Private Equity with 6.4%, High-Tech Gründerfonds (HTGF) with 4.88% and BayBG with 4.84%. Software provider ASC Technologies holds the remaining 0.34%.

Earlybird and BayBG led a €1m seed round for NFon in July 2008. Two months later, HTGF joined the syndicate, contributing an additional €500,000.

MIG joined Earlybird and HTGF in August 2009 to provide a round thought to be in the high single-digit million range, and the same consortium backed a fourth €4m funding round in November 2010.

Bayern Private Equity first invested in January 2012, leading another €4m round alongside existing investors, and it returned to the final pre-IPO round led by BayBG in April 2013. BayBG invested €10m in the round, which also took investment from Milestone and Earlybird.

Founded in 2007, NFon is a cloud-based telephone system for companies including banks, insurance providers, transport providers and the food and beverage industry.

The company is headquartered in Munich and has additional offices in Mainz and 13 other European countries. It employs 150 people and generated revenues of €35.7m in 2017 with an adjusted EBITDA margin of 0.5%. The company has recorded a compound annual revenue growth rate of 30% between 2015 and 2017.

Berenberg is the sole global coordinator and is also mandated as joint bookrunner with Baader Bank and Oddo BHF.