Initiate not going for Initial

In what could not be described as surprise move, Initiate Systems just pulled its previously planned Initial Public Offering. The turmoil in the capital markets means that it is difficult time to raise money right now, and so it seems sensible to wait until a better time for going public. This does raise the possibility of whether Initiate will consider raising money another way (update – it just did a USD 26 million private round), or indeed whether a potential predator might consider this a good time to pounce.

Generally this has little impact, but a lack of exit opportunities is a poor thing for the enterprise software sector in general, as venture capital firms are less likely to invest in earlier stage firms with one of the two exit routes (the other being a trade sale) closed. Initiate had made excellent market progress with its MDM technology, and it would have been nice to see a pure-play MDM vendor going public.