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Sonos files for initial public offering

07 July 2018

Sonos filed for its widely expected initial public offering, as the connected-speaker company looks to take on tech-industry giants Amazon, Google and Apple.

The company will trade under the symbol "SONO" on the Nasdaq Global Select Market.

The company says it has registered over 19 million devices since it was founded in 2002. During its full 2017 fiscal year, which ended September 30, Sonos recorded a net loss of $14.2 million on revenue of $992.5 million.

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Our competition includes established, well-known sellers of speakers and home sound systems such as Bang & Olufsen, Bose, Samsung (and its subsidiaries Harman Kardon and JBL), Sony and Sound United (and its subsidiaries Denon and Polk), and developers of voice-enabled speakers and systems such as Amazon, Apple and Google.

Sonos also relies heavily on Amazon as a retail channel.

Sonos has filed to go public. It could happen in multiple ways: Amazon could cut off access to Alexa, removing Sonos products from its site-or even more dramatically-cut access to AWS or raise AWS prices to a prohibitively expensive level.

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In terms of risk factors, the company points to its history of losses, the unpredictability of its revenue growth and the fact that it operates in "highly competitive markets" and is "dependent on partners who offer products that compete with our own". Its products are being integrated in Apple's new AirPlay 2 wireless music-streaming system and Google's Assistant. With Alexa-powered Sonos speakers, customers can use voice commands to play music and operate other smart devices. A little over half of its fiscal 2017 revenue came from outside the US.

In May, Sonos laid off 96 employees, which was viewed as preparation for an IPO. In addition, Inventec has the right to terminate its agreement with Sonos for any reason with 180 days' notice, according to the filing. KKR is its biggest single shareholder, holding 25.7% of pre-IPO outstanding shares in the company, while Index Ventures owns 13% and Redpoint has 5.2%, according to the Sonos filing.

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Sonos files for initial public offering