Epiphany files to raise $50 million through IPO

The maker of technology to manage customer relationships files to raise as much as $50 million through an initial stock sale.

Epiphany, a maker of technology to manage customer relationships, filed to raise as much as $50 million through an initial stock sale.

The Palo Alto-based start-up, which is backed by capital from Kleiner Perkins Caufield & Byers, makes technology that lets companies tailor information provided to customers over the phone or through the Internet. The solution integrates data, from sales to marketing to finance, and gives employees the tools to analyze the information.

Chief executive Roger Siboni, 44, was previously deputy chairman and chief operating officer at KPMG Peat Marwick. He has helped turn technology start-ups into public companies for more than two decades. Siboni has been Epiphany CEO since 1998, according to a filing with the Securities and Exchange Commission.

"We're impressed," said Frank Gillett, an analyst at Forrester Research. "Epiphany is one of these polished start-ups with a lot of style and presentation and a marquee name--but it's still just a new company getting going."

Customer-relationship software companies have been racing to go public amid forecasts of growth in the market for front-office applications, used by sales and marketing departments rather than by operations employees.

The area has also drawn the interest of established firms such as Oracle, which is betting that its customer relationship management software is helping position the company for longer-term growth.

Buzzwords
"A lot of the buzzwords lately have to do with customer relationship management and front-office applications over the Internet," said Mark Murphy, an analyst at First Albany. "People are stepping back and saying this might be the next big thing after ERP software. Anyone that can participate in that space is finding this quite an opportune time to public."

Broadbase Software, based in Menlo Park, California, last week filed to go public. Net Perceptions, which went public in April at $14 a share, fell 0.63 to 20.75 in midafternoon trading.

Epiphany said it would use proceeds from the stock sale for general corporate purposes, including working capital. Some money may be used for possible acquisitions of businesses or technologies.

Revenue totaled $5.1 million in the six months ended June 30, 1999 compared with $863,000 in the year-earlier period. Net losses rose to $9.3 million in the first six months of 1999 from $3.9 million in the 1998 first half.

Customers
Sallie Mae uses Epiphany technology to sell new financial services to existing customers as their financial status changes. Hilton Hotels uses the solution to gather and analyze data on guest behavior in order to improve service and relationships with corporate customers.

Autodesk, Hewlett-Packard, and Charles Schwab were among the company's biggest customers in 1998.

Chairman Eliot Wegbreit, 55, founded Epiphany in 1996 with Executive Vice President Steven Blank, 45. Wegbreit was previously a principal at Hambrecht & Quist Venture Capital from 1988 to 1998. Blank was CEO of Rocket Science Games. The founders each hold company stakes of about 10 percent before the initial stock sale.

The number of shares to be sold and their estimated price range will be disclosed in a future filing. The $50 million top value was used solely to calculate a registration fee.

An underwriting group led by Credit Suisse First Boston will market shares to the public. Epiphany will seek to trade on the Nasdaq Stock Market under the symbol "EPNY."

Copyright 1999, Bloomberg L.P. All Rights Reserved.

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