Could HubSpot’s IPO Plans Be Hindered By Exec Departures?

Published: July 31, 2014

HubSpot’s plans to launch an IPO later this year could be stalled by the departures of David Cancel, Chief Product Officer, and Elias Torres, VP of Engineering, which were announced in a blog post by HubSpot CEO Brian Halligan.

In the blog, Halligan noted their contributions to the company’s engineering and product development efforts, including the growth of the product development team from 20 members to more than 100, and the company’s high rankings among marketing automation users. “Our software platform includes a world-class marketing automation application, as well as many other applications that did not exist three years ago. David and Elias are part of the leadership team that has empowered those accomplishments and we thank them for their contributions over the past three years.”

HubSpot began laying the groundwork for an IPO earlier this year, according to a report in the Wall Street Journal, but company officials would not confirm the plans. The vendor completed a $35 million round of funding in Q3 2012. HubSpot’s revenues grew 50% in 2013 to $77.6 million.

The past several years have seen a flurry of acquisitions, as Adobe acquired Neolane, IBM bought Silverpop, Salesforce purchased ExactTarget and Oracle acquired Eloqua. HubSpot and Marketo, which launched a $75 million IPO a year ago, remain among the few independent marketing automation vendors. Marketo’s stock began trading at $23.10 a share on May 17, 2013, hit a high of $45 over the past year and traded at $28.87 on July 30. The vendor reported a 60% revenue growth in Q2 1014.

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In the blog post, Halligan noted that Cancel and Torres will remain with the company through HubSpot’s INBOUND conference, which is being held September 15-18 in Boston. The pair then plan to launch an unnamed start-up together later this year.

Cancel and Torres came to HubSpot in 2011 when the vendor acquired their company, Performable, for $20 million. The Boston-area firm, which Cancel ran and where Torres was part of the product team, was also developing a marketing automation system.

The tech IPO market has been cooling off recently, with companies such as Box, Inc., a digital storage provider, delaying its IPO, and others, such as Paycom Software, underperforming analysts’ expectations. 

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