Will 2006 be the year of the RFID IPO? It appears that the smart tag is headed for Wall Street. VeriChip, a division of Applied Digital, filed for an initial public offering (IPO) late last year and could have its stock listed by June. The company, which makes and sells RFID chips for use in humans, hopes to raise $48 million through the offering.
VeriChip's primary product is a microchip that is implanted under the skin to identify patients in hospital emergency rooms. Systems using the chip are installed in 4,000 North American hospitals, according to the company. The VeriChip has been a topic of controversy with privacy advocates, who are opposed to using RFID technology in humans (and elsewhere).
Other RFID players that could file for IPOs this year include Impinj, a producer of RFID tags and readers that just closed on a $26.5 million round of financing, and Alien Technology Corp. Both are highly leveraged venture-backed RFID equipment providers. Alien raised $66 million last summer, bringing the total capital invested in the company to more than $200 million. Venture capitalists often recoup their investments by arranging for the company to go public or to be acquired.
For chip makers, at least, the IPO route appears to be the less likely of those two options. "I think we're always looking at [the possibility of an IPO] but certainly the acquisition route happens more often," says Ron Norris, a managing partner with VentureTech Alliance, which invested in Impinj's last round of financing.