Megaport announces IPO to raise AU$25m

Elastic interconnection services provider Megaport has announced its initial public offering (IPO), hoping to raise AU$25 million in a bid to list on the Australian Securities Exchange (ASX) and expand its services across the United States and Europe.

Under the IPO, 20 million shares are being offered at AU$1.25 per share, with Megaport saying the IPO and ASX listing will help the company continue to grow overseas.

"To achieve our vision, we plan to extend the platform deeper into existing markets and expand into new markets, particularly key markets within North America, Europe, and Asia. The capital raising under the IPO helps the business accelerate those plans," said Megaport CEO Denver Maddux.

Megaport, founded in 2013 by Australian technology entrepreneur Bevan Slattery, provides end-to-end network connections through 34 datacentres across Australia, Singapore, New Zealand, and Hong Kong to business customers.

"Rather than enterprises needing to purchase long-term, fixed bandwidth circuits between datacentres and their cloud providers, Megaport has developed a platform that uses software-defined networking (SDN) to enable our customers to provision secure, dedicated, and highly scalable circuits otherwise known as 'elastic interconnects' between their network and other networks connected to the Megaport Fabric," said Slattery.

"With Megaport, customers can provision elastic interconnects for as long as a year and as short as one day, as slow as 1 megabit per second or as fast as 100 gigabits per second."

While Megaport initially also operated in the dark fibre business, it spun off its dark fibre assets to found separate company Superloop, so that it could focus solely on expanding its layer 2 elastic connectivity platform outside of Asia and Australia.

Superloop's 130km fibre network in Sydney, Melbourne, and Brisbane was subsequently sold off to Amcom. In return, Superloop secured a 15-year exclusive lease on the network, which services such customers as iiNet, M2, and Anittel.

Superloop's own IPO raised AU$17.5 million through more than 2,300 investors, with that company then listing on the ASX.

Slattery told ZDNet last year that it was important to divide Superloop and Megaport as the latter looks at growing beyond the APAC region.

"We looked at Megaport and where its rollout expansion was, and it was beyond those markets. I wanted to be very clear about what Megaport does and what it doesn't do. Megaport is a layer 2 elastic connectivity platform. It's about making it easier for the network and cloud guys to interconnect," he said.

"I didn't want people to also think it was a dark fibre provider."

In appointing Maddux, a former Microsoft senior director for global network, to replace himself as CEO of Megaport last year while Slattery heads up Superloop, Slattery said it would enable the company to eye the international market.

"We want to take Megaport global, and what that needs is a lot of dedication and focus and attention. What it takes is great leadership and a great network. The appointment of Denver as CEO of Megaport was tremendous because it gives us everything we need to be successful from a global standpoint," Slattery said.

"He's done the network side of it, but he's also done the leadership side of it, particularly in the Microsoft days."

Maddux also said last October that Megaport would be looking at opportunities in the US and Europe.

"There's a lot of interest in Europe for the Megaport model, as well as the major cities in the US, where we may have some competition on features but not in terms of the overall capabilities of the platform," Maddux said.

Megaport now has more than 200 customers, and is an Amazon AWS, Microsoft Azure ExpressRoute, and Google Cloud Interconnection partner. It aims to expand its business into 45 datacentres across Europe and North America in 2016.