ShotSpotter takes advantage of market niche with $35 million IPO
Have you ever thought of how many lives could be saved if first responders were just a bit quicker? If you have, then you’re on the same level as ShotSpotter. ShotSpotter Inc. (Pending: SSTI) is a Newark, California-based company that helps law enforcement agencies in USA detect gunshots as soon as they happen. The result? Faster response times and more lives saved. Founded in 2007, ShotSpotter owns over thirty patents. Currently the firm operates in the US but it has its eye on dominating the global stage by the end of 2017.
ShotSpotter uses both hardware and software to identify and locate gunshots. The hardware part of it consists of teh company’s sensors. ShotSpotter installs the sensors for clients. The sensors detect any vibrations in the region that they surround. Any data picked up by the sensor is then passed on to a ShotSpotter-patented software for comparison. The software compares the data to similar sounds including car backfires and lit flares. Negative results are marked false alarms. When the sensors pick up a gunshot, however, the software alerts nearby local authority. Fast information transmission helps law enforcement officers to respond to shootings fast. This fast response is important for saving lives, especially when no one else reports the shots fired.
ShotSpotter revealed on Tuesday that it had filed an S-1 with the Security and Exchanges Commission to the delight of investors. The move came after one university in Alabama announced signing a long-term contract with the gunshot detection agency. ShotSpotter, according to the announcement given on Tuesday, intends to raise $35 million in its initial offering to the public on the NASDAQ market. The company did not disclose the number of shares it intended to sell or the price range within which it had placed its shares. At this point, the company’s valuation and expected market value cannot be estimated. The sole manager for the deal was announced to be Roth Capital.
ShotSpotter has so far obtained its revenue from capital gained by selling off shares privately to investors and from its operations. Major stockholders in the gun detection firm include Motorola Solutions, Labrador Ventures, and Lauder Partners. ShotSpotter sells its products directly to consumers. For those who cannot afford them, the company also offers two subscription-based models, the SST SecureCampus and the ShotSpotter SiteSecure.
Several factors make ShotSpotter’s IPO one to look out for. The company has extremely promising financials with increasing gross margins, revenues, and free cash flow. In the fiscal year that ended on March 31st, 2017 ShotSpotter recorded $17 million in sales revenue alone. Also, the company has significant growth potential and because it has no competition, has a limitless market. Partnerships with groups such as GuardianEdge, AT&T, ESRI and the IACLEA, which deals with campus safety, assures investors that the company will always have a steady income.
ShotSpotter will use the proceeds from its IPO as working capital and as payment for its debt to Orix Growth LLC. The firm also plans to make investments, conduct research and market assessments using the funds gained from the issuance.