The prospectus for Inside Secure's IPO this month shows that the company made US$47m from the sale of NFC chips in 2011, that these were mainly delivered to RIM for use in BlackBerry NFC smartphones and that Inside believes it now has a share of close to 50% of the overall market for NFC chips for mobile phones.
The prospectus for the IPO of NFC and contactless chip specialist Inside Secure reveals that the company sold a total of 17.4m NFC chips in 2011 and that revenues from NFC chip sales were "mainly" received from Research in Motion (RIM) or from subcontractors to RIM.
Inside's revenues from the sale of NFC chips grew rapidly during the course of 2011, the prospectus explains, as RIM ramped up production of NFC BlackBerry phones. NFC chip sales in the first quarter were US$1.74m, rising to US$6.69m in the second quarter, US$15.22m in the third quarter and US$23.30m in the fourth quarter to make total NFC chip sales for the year of US$46.96m — an average US$2.70 per unit. Overall sales, including revenues from its digital security and secure payments divisions, were US$151m in 2011.
By 2014, Inside Secure expects to achieve an overall consolidated turnover of close to US$400m, based on three assumptions:
- The mobile NFC chip market doubling in volume in each of the years from 2012 to 2014.
- Growth in the online security market, served by Inside's digital security division.
- Transition of the US market to dual interface contact and contactless EMV chips from 2013. Inside's secure payments division currently supplies 75% of the chips used in US contactless payments cards.
The prospectus also explains that:
- The NFC deal Inside Secure signed with Intel in December 2011 will see most revenues being generated from royalty payments and for payments for achieving development milestones.
- Inside has its own embedded secure element chip under development and aims to have this available for client testing during 2012. The company currently offers a combined NFC controller and secure element package which uses a secure element chip from Infineon.
- The company holds more than 500 patents, of which more than 200 relate to NFC and contactless technology.
- Continued investment in research and development means that Inside is not yet profitable, but the prospectus explains that the company aims to reach breakeven during the latter months of 2012.
Inside Secure's shares are to be traded on the NYSE Euronext Paris stock exchange from 17 February. The company aims to raise up to €79.3m from its initial public offering (IPO), from individual investors in France and from institutional investors in both France and overseas. Share prices are expected to be in the €7 to €8.54 range with the final offering price to be set on launch day. BNP Paribas and Natixis are acting as joint lead managers and joint bookrunners. Existing investors include Assa Abloy, Motorola Mobility, Nokia Growth Partners, Qualcomm and Visa.
The IPO, originally scheduled for mid-2011, "will enable Inside Secure to accelerate its growth in and outside France, to significantly increase its financial capacity and to create value for its shareholders," says Rémy de Tonnac, Inside's CEO.