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Start-up Viadeo to test appetite in Paris for tech IPOs

By Leila Abboud

PARIS (Reuters) - French start-up Viadeo, the biggest online network for job seekers in France and China, plans to float its shares in Paris in a test of whether European investors flock to growing Internet players like their U.S. and Asian peers.

The company, which competes with market leader LinkedIn Corp and Germany's Xing among others, did not say in a regulatory filing on Wednesday how much money it aimed to raise, nor did it give a specific calendar for the initial public offering (IPO).

Its listing will be the first large technology IPO in Paris since 2006 when real estate listing group SeLoger sold its shares. Other promising French start-ups such as web advertising specialist Criteo chose to list in New York where valuations tend to be higher because investors are used to evaluating fast-growing Internet companies.

Viadeo is planning to float as Europe's IPO market makes its hottest start since 2000.

Global IPOs almost doubled in value in the first quarter of 2014 from the same period a year earlier, according to Thomson Reuters data, while the value of European IPOs soared 191 percent to hit $15.2 billion.

Viadeo's biggest markets are France, China, Russia, and French-speaking Africa. The firm has recruited 60 million users since it was founded in 2004 by current chief executive Dan Serfaty and strategy chief Thierry Lunati.

Sefraty told newspaper Le Figaro in an interview that the proceeds from the IPO would help the company "increase Viadeo's advantage in China and strengthen its marketing team to sell more products to recruiters".

With a business model similar to LinkedIn, Viadeo does not charge users for basic access to its website, but offers premium services to job seekers who pay a monthly fee. It also earns revenue by charging job recruiters to post job offers and search for candidates.

Viadeo posted sales up 11 percent to 30.9 million euros ($42.07 million) last year, and an operating loss of 14.5 million euros because of big investments in the business, according to the document filed with the AMF market regulator.

Some 95 percent of its revenue comes from France where it has 9 million members, since most of its 20 million Chinese subscribers do not pay fees. China, although growing rapidly, generated only 841,000 euros in sales last year.

About half of Viadeo's sales come from subscriptions, 20 percent from selling advertisements on the site, and 30 percent from services offered to corporate recruiters.

California-based LinkedIn is a giant compared to Viadeo. Its membership rose 8.3 percent to 300 million worldwide from 277 million at the end of the fourth quarter, and it is targeting annual sales of $2.06 billion to $2.08 billion.

Germany's Xing with 14 million members is more closely comparable to Viadeo. Xing had 84 million euros in sales last year on operating profit of 22.8 million euros.

Xing is valued at roughly 6 times sales and LinkedIn at 9 times sales. If Viadeo trades in these ranges, it could reach a valuation of 180 million to 200 million euros.

(Editing by Keiron Henderson)

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