- No line of sight to profitability
- A hardware play with 79% negative gross margins, and no clear walk to positive gross margins
- Revenue recognition issues
- A market that is seeing increased competition from the "dumb meter" companies such as Itron and Landis+Gyr - which are winning more of the new awards
- Long sales cycles with customers that are questioning the value proposition of the product
So why not wait?
Well, after raising $400 million, Silver Spring has likely tapped out it's ability to raise private capital. The Company is using the public market as a source of venture funding. The IPO is less a way to get an exit for its investors (although that is also at play here), and more a way to fund the company to profitability when no one else will.
I want Silver Spring to succeed. It will be good for everyone (cleantech space, smart grid companies, cleantech VCs, etc) - which is why I'm dismayed at the bankers/investors pushing another IPO which will be facing an uphill battle from the get-go.
Time will tell - and as always - I could be completely wrong.