After landing a fresh round of investment, security company Mimecast is considering an initial public offering (IPO) as it looks to boost its presence in Europe, the US and South Africa.
The company, which sells cloud-based email archiving, security and continuity services for Microsoft Exchange and Office 365, announced last month that it had raised $62.2m in Series C funding from global private equity firm, Insight Venture Partners, as well as its existing investors Dawn Capital. The money will be used to expand in the US, Australia, South Africa and other territories as well as to expand the company's offerings.
Mimecast was founded in the UK in 2003 by South Africans Peter Bauer (now CEO) and Neil Murray (CTO), and the founders have retained close ties to South Africa - today one of the company's biggest markets.
After a business associate persuaded them to bring their product to the country in 2004, Mimecast landed a 16,000-seat deal with government-owned transport company Transnet.
Today, South Africa accounts for around 25 percent of Mimecast's $70m in annual revenues – no small beer for a country that accounts for less than two percent of global IT spending. One reason for Mimecast's relatively large South African footprint is that it was one of the first cloud email providers to invest in the market, Bauer says.
According to recent research by analysts BackChannel, Mimecast has a 30-percent share of the South African cloud email security market. Bauer estimates that Mimecast's share of the more fragmented US and UK markets is around one percent and 10 percent respectively.
With 6,000 customers globally and over 1.5 million users worldwide, Bauer believes that there is scope to double the size of Mimecast's South African business and to grow exponentially its business in the UK and US, where its share of the market is still small.
Bauer and Murray are veterans of the South African IT listings boom of the late 1990s, when both sold their businesses to larger Johannesburg Stock Exchange-listed companies that were on the acquisition trail. The hard lessons from that boom and the crash that followed mean they'll be taking a cautious approach to taking the company public, says Bauer.
"We have seen a lot of companies of our size, scale and business model IPO quite quickly," he adds. "But you have to have a solid business plan. A lot of our customers would feel comfortable and reassured [if Mimecast were a publicly traded company]." Mimecast has not yet decided whether to stage its IPO in London or the US.
In addition to growing its existing business within the European, US and South African markets, Mimecast intends to use the investment to add new elements to its corporate email offerings. For example, it will be introducing collaboration tools to its products in the coming quarters, says Bauer.