Budapest-based Freesoft expects to raise some HUF693m ($3.44m) from the sale of 385,000 shares, almost eight times more than it had originally expected. The company had originally expected the subscription of a minimum of 50,000 shares would raise approximately HUF90m ($447,000).
Freesoft provides software and services around document management, e-government and security tools. But with a workforce of some 70 people, the company ranks some way behind Hungary’s largest IT services provider Synergon Information Systems, which employs 573 people, and made revenue of HUF 19.9bn ($98.9m) in 2003.
The move is the latest evidence of the increased demand for outsourcing development work to the low cost Eastern European market. Freesoft itself, makes some 25% of its revenue outside of Hungary and markets itself as a nearshore software developer.
The company, which counts the National Tax Office, Vodafone Hungary and Budapest Bank among its customers, plans to use the proceeds from its IPO to expand into the US market and to perform other acquisitions. The company expects to grow revenue 30% to HUF959m ($4.76m) in full year 2004, and then by 35% in 2005, and a further 30% in 2006.
