By Todd Cohen
San Diego-based Kintera, which leases web-based software to help nonprofits raise money and manage relationships with volunteers and donors, plans to raise $46 million by issuing stock to the public for the first time.
The initial public offering follows continuing expansion by Kintera, including the acquisition in September of Little Tornadoes, a web developer in New York City and Pittsburgh, and Virtual Sprockets, an Internet applications firm in Poolesville, Md.
“We’ve acquired all or pieces of nine companies,” says Harry Gruber, Kintera’s co-founder and CEO. “This is just part of the consolidation of this industry.”
Citing federal rules that bar comment in advance of initial public offerings, Gruber will not talk about Kintera’s plans.
But documents filed with the U.S. Securities and Exchange Commission says the firm plans to build its customer base and strengthen its market position by investing in its sales, marketing and business development, including the acquisition of products, technologies or companies.
The firm has 113 employees, including 9 in finance and administration, 66 in sales, marketing and customer support, and 38 in product development and support, and plans to hire “a significant number of employees in the future,” the documents say.
Kintera has signed contracts with more than 500 nonprofits since launching its service in the first quarter of 2001, the documents say, and processed online donations totaling $38.6 million in the first nine months of 2003, up from $9 million for all of 2002.
But the company, which estimates that online giving overall exceeded $1 billion in 2002, says it has posted operating and net losses in every fiscal quarter since it was founded, and as of June 30, 2003, had an accumulated deficit of $28.6 million.
Net revenue totaled more than $2.9 million in the first half of 2003, up from more than $1.9 million for all of 2002.
Kintera says it has built it market mainly among health and human services nonprofits that use its main product, Kintera Sphere, to manage the walk-a-thons and other events on which they depend to raise money.
Now, it says, it will sell “solutions for specific fundraising events” to local chapters and national nonprofits, and will target customers in other sectors of the nonprofit market.