Online video platform Brightcove, as expected, has filed with the SEC for a proposed IPO this morning, looking to raise $50 million.
According to the S-1 filing with the Securities and Exchange Commission (available here), Brightcove's revenue has grown from $24.5 million in 2008 to $43.7 million last year. The company is on track for record revenues this year, earning $28.4 million in the first six months of 2011, up from $20.3 million during the same period a year ago. All of it, the company said, is from its Video Cloud product.
But Brightcove points out that it has yet to turn a profit and said it had a consolidated net loss of $17.8 million in 2010 and $9.7 million for the first half of 2011.
"We expect to continue to invest in the growth of our business and operations and to incur operating losses on an annual basis through at least the end of 2012," the company said in its filing, adding, "We have a history of losses, we expect to continue to incur losses and we may not achieve or sustain profitability in the future."
Other risk factor the OVP cited include:
- A short operating history
- Unknown consumer demand
- Growth predicated on expansion outside the U.S., which incurs the normal risks of doing business internationally
- Rapid technological change
- Customer retention challenges
- Rapid growth has placed strain on the company's management and infrastructure
- Significant competition.
But Brightcove lists an equally strong number of factors that could make its IPO a success.
Again, from the S-1 filing, the company said it has 3,295 customers in more than 50 countries, and that its customers have used Video Cloud to deliver an average of 700 million video streams per month so far in 2011.
And that's just the tip of an addressable market Brightcove expects to grow from a current $2.3 billion, to more than $5.8 billion in 2016.
Brightcove said increasing demand for online video content were creating a quandary for some content owner who currently host their videos in-house, as opex and capex demands grow and technology evolves.
"Content owners have attempted to address these challenges with two common solutions: video-sharing sites and in-house solutions," the company said in its filing. "Many content owners are finding these solutions inadequate.
"We believe there is a significant opportunity for a comprehensive SaaS solution designed to address the growing complexity and expense organizations face when seeking to publish professional digital media," it said. "Given the industry trends and the limitations of video-sharing sites and in-house solutions, we believe adoption of outsourced online video platforms will increase."
Brightcove in October hired Chris Menard--who helped Phase Forward through several acquisitions, a successful IPO and, later, an acquisition by Oracle--as its new CFO. Brightcove CEO Jeremy Allaire said Menard's experience with acquisitions, another strategic priority of Brightcove, and his experience as a public company CFO that specialized, as does Brightcove, in a SaaS business, was a major plus.
Menard is one of several new additions at Brightcove including President and COO David Mendels, who came over from Adobe Systems in January, and former Macromedia CFO Betsey Nelson, who joined Brightcove's board.
"My expectation is that over the next year any number of large publicly traded Internet companies will try to get into this market either organically or through acquisition," Allaire told Reuters.
Morgan Stanley & Co. LLC and Stifel, Nicolaus & Company, Incorporated will act as joint book-running managers for the offering. RBC Capital Markets, LLC, Pacific Crest Securities LLC and Raymond James & Associates, Inc. will act as co-managers.
- see the S-1 filing
- see this release
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