4, 8, 19, 27, 34; Powerball 10. Are these your numbers from last night's Powerball drawing? If so, congratulations! According to the news this morning, you and at least two others have just won a jackpot prize of approximately $1.6 billion! Before taxes, that works out to about $50 million a year for 30 years or a one-time lump-sum payout of approximately $983.5 million. Split three ways, each winner would start with $310 million.
If you are strapped for ideas on what to do with your wealth, you could just buy a New IP company or two. Think about the bargain that ADVA Optical Networking (Frankfurt: ADV) got with its $35 million Overture Networks Inc. buy yesterday. With a $310 million lump-sum payout, you could buy one Overture per year for quite a while.
Below are three examples of New IP companies that might potentially be affordable to the lucky winner. Bear in mind that none of what you read here is actual investment advice or other financial or legal advice -- and that I based the below on what is publicly reported regarding their valuations. Instead, consider this a short list of options of how to blow hundreds of millions in New IP style.
Sadly, as for me, as you can see from the photo, I won't be making any big-ticket purchases anytime soon.
Not a Winner, Just a Dreamer
Winning Powerball tickets were sold in California, Florida and Tennessee. Winners will get approximately $310 million each before taxes.
The Affordable: ServiceTitan
Mobile is hot and so is software-as-a-service (SaaS). ServiceTitan is combination of both in that it's a mobile SaaS provider catering to the home-service business vertical, offering a variety of cloud-based communications and instant tracking solutions to the residential home industry.
This past June, ServiceTitan secured a valuation of approximately $100 million after a Series A funding round in which the company received $18 million. Last night's Powerball winner might easily scoop up the company while retaining a few hundred million dollars on a lump-sum payout (even after taxes).
The Stretch: ADVA Optical Networking
As I mentioned above, network technology firm ADVA has caught a heap of attention lately in the world of the New IP. Yesterday -- well before the winning Powerball numbers were drawn -- ADVA announced its pending acquisition of Overture Networks for a relatively cheap $35 million. Overture's network functions virtualization and carrier Ethernet offerings should nicely complement ADVA's carrier Ethernet and cloud access solutions -- while sizably increasing the German company's North American presence. (See ADVA Speeds to New IP With $35 Million Overture Bargain.)
Light Reading estimates ADVA's value at $450 million. Two of the Powerball winners might be able to join forces to afford a hostile takeover of this Munich firm -- but without much left after taxes. (See ADVA CEO: Overture Acquisition Adds to Our Open NFV Pitch.)
The Unicorn: Twilio
Cloud is hot right now and so is enterprise technology. Twilio Inc. (NYSE: TWLO) is an IaaS cloud-communications API company focused on efficient enterprise telecommunication. The company is especially big on security. Box has contributed two-factor authentication to Twilio's product line, and last year Twilio acquired Authy, an information security startup that focuses on two-factor authentication.
A few months after the Authy acquisition, Twilio raised over $100 million in Series E financing -- raising its valuation to $1.1 billion.
This technically may make Twilio unattainable for the Powerball jackpot winners because of taxes and the sub-billion lump-sum value -- but those lump-sum winnings could be at least enough for a substantial equity stake.
What do you think? How would you have spent the Powerball money in New IP-style? And keep in mind, this is not actual investment advice. Just some fun for a Thursday in January.
— Joe Stanganelli,
Freelance Contributor, special to The New IP