(Reuters) - Sonos Inc, the U.S. company that popularized wireless speakers, priced its initial public offering below its targeted range on Wednesday, signaling investors are selective about backing stock market hopefuls in the technology sector.
Sonos is trying to convince investors it can withstand new competition from the likes of Apple Inc and Alphabet Inc’s Google based on the popularity of its multi-room connected audio system and the numbers of third-party apps and services it supports.
The company said it sold around 5.6 million shares at $15 per share in the IPO, below its $17-$19 target range, raising $83.3 million(63.45 million pounds). Existing Sonos shareholders, which include investment firm KKR & Co, sold a further 8.3 million shares.
Santa Barbara, California-based Sonos plans to start trading on the Nasdaq on Thursday under the symbol “SONO”.
Founded in 2002, Sonos’ speakers and the company’s tie-ups with around 100 music streaming providers including Apple Music, Pandora, Spotify and TuneIn have attracted audiophiles around the world.
Sonos had hoped to follow a string of other splashy technology listings in 2018 from the likes of Spotify Technology SA, Dropbox Inc and DocuSign Inc.
With many technology firms having opted to stay as private companies for longer, these firms tapped into investor demand for high-growth stocks to diversify away from the so-called FANG group comprised of Facebook Inc, Amazon.com Inc, Netflix Inc and Google-owner Alphabet Inc.
Sonos pitched a three-pronged strategy to investors of its open system based on other platforms, inter-connectivity of its products, and the quality of its speakers.
The company has faced pressure though over both the pricing and variety of its products, as smart speakers such as Amazon Inc’s echo and Apple’s HomePod entered the market.
In addition to KKR, Sonos’ biggest investors include co-founder John MacFarlane and venture capital firm Index Ventures.
Morgan Stanley, Goldman Sachs and Allen & Co are among the lead underwriters for the offering.
Reporting by Joshua Franklin in New York; Editing by Sandra Maler