Sonos, the Luxury Smart Speaker Manufacturer, Files to Go Public in 2018

On July 6th, Sonos Inc. filed an application to be listed on the NASDAQ. In the application, the high-end home speaker company filed a prospectus with the SEC that gives insight into its current financial profile. The company, which will be listed as SONO, stated in its application that it seeks to raise $100 million, but that number is generally considered a placeholder amount.

Sonos, Inc. has been backed by venture capital and private equity firms since as early as 2005. In 2012, Index Ventures and KKR invested $25 and $135 million into the company, respectively.

Sonos, headquartered in Santa Barbara, California, has raised over $450 million dollars in the sixteen years since it was founded and is currently receiving valuations between $2-$3 billion. The market will be watching this IPO as the smart sound wars heat up in this multi-billion dollar industry.

Sonos posted a revenue of almost $1 billion in fiscal year 2017 with a loss of $14.2 million. This is a significant improvement over fiscal year 2016 where the company had a revenue of $901.3 million and recorded a loss of $38.2 million. The company’s adjusted earnings before interest, taxes, depreciation, and amortization are positive, despite these losses. Sonos is entering the market in the same year that household name technology companies such as Dropbox, Spotify, and Domo have all had IPOs.

Amazon Alexa Sonos Play One
Amazon Alexa Sonos Play One. Image courtesy of Amazon

Sonos filed its application with the SEC ahead of a product launch in the hardware company’s high-end speaker line. The Sonos Beam, a soundbar built to serve as both a TV speaker and Alexa-powered speaker, is significantly smaller and less expensive than the Playbar, the company’s other TV speaker offering. The Sonos Beam will be released on July 17th. Sonos may be expecting the success of the Beam to help buoy its initial offering price. 

Sonos’ Strategy

Sonos is setting itself up as the plug-and-play surround system for the current generation of smart TVs. Sonos does not try to create its own software for televisions, allowing its products to simply be a conduit for sound. Its newest product, the Beam, will not ship with a remote, the volume is controlled directly through the television.

Black Beam Soundbar white background
Sonos Beam. Image courtesy of Sonos

Sonos has produced a series of speakers that can be integrated with a smart home platform including its popular stand-alone speaker, the Play One. Sonos generally steers away from developing its own personal assistant, instead focusing on ensuring its compatibility with the leading assistant technology including Amazon’s Alexa and Apple’s Homekit. The company states that all of its recent products will be compatible with Google Assistant by the end of 2018.  

Amazon’s Alexa, with its Echo and Echo Dot, appears content for now to allow other companies to fill in the space for high-quality speakers; Sonos has prioritized making its products work well with the smart platform. Apple and Google, on the other hand, have both created their own high-end speakers in an effort to control both the hardware and software in consumers’ homes. Google released the Google Max in September 2017 to provide Google Assistant a dedicated home speaker. In February 2018, Apple released the HomePod and Airplay 2, a software update that allows Apple products to pair with Sonos speakers.

Featured image courtesy of Amazon

Gabe Turner

Gabe Turner

Gabe Turner is an attorney and journalist with a passion for home tech and secure, efficient living. Since graduating from NYU Law, he has maintained a paradoxical existence of trying to live life adventurously while remaining staunchly risk-averse. He is torn by the dual desires of wanting to only be in Brooklyn writing about housing policy and smart home tech and aspiring to visit his friends scattered across the globe. Gabe believes that stable, safe communities are the cornerstone to a vibrant and healthy society, and it is this passion that brought him to contribute to Security Baron.

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