Accoona Launching IPO, Concerned?

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Unlike in 1999, you don’t hear a lot about the gold rush of IPOs these days. On occassion one comes to light in online media, but for the most part bringing a company private is more practical due to the frustration and cost of the Sarbanes Oxley laws. However the recent IPO announcement of Accoona has brought interest and skepticism.

Accoona is defined as a search, lead generation and e-commerce company. As revealed in its filing it has lost approximately $80 million over the past three years with annual revenues in excess of $150 Million. For the three months ended March 31, Accoona reported a loss of $14.8 million, compared with a loss of $5.5 million the same period a year earlier. Revenue for the quarter rose to $37.5 million from $23 million the year-ago period.

As reported in VC Ratings, company co-founder Mr. Rousso and stockholder has raised some eyebrows from the S-1 filing. These are quotes from the S-1 filing:

– “In 1999, in the case titled The Government v. Rousso and Laroze, Mr. Rousso [company co-founder and stockholder] was convicted in France of, inter alia, securities fraud, and as part of the proceeding he was credited with time served and fined 120,000 euros.”
– On November 1, 2004, we entered into a Consulting Agreement with SPBD (a company wholly owned by Mr. Rousso, who is a co-founder and a substantial stockholder of ours). The agreement, which was subsequently amended on March 15, 2005, September 1, 2005, December 31, 2005; and August 4, 2006, is for strategic planning and business development services,
– On May 29, 2007, we entered into a Consulting Agreement with Kosai International Limited (“Kosai”). Jean-Gabriel Ture, a member of our Board, holds a 30% interest in Kosai and has served as one of Kosai’s director since 2004… We currently pay Kosai on a daily basis at the rate of $1,113 per day.
– Mr. Pfeiffer [former Compaq CEO who had been chairman of Accoona since 2004] resigned as a member of the board of directors in March 2007.

To date, substantially all of Accoona’s revenue has come from its e-commerce business in North America with a concentration in Appliances. The surprising point noted in the filing is that Accoona has no venture funding.

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