Brightcove Files $50 Million IPO, Investors Get A Rare Pure-Play Opportunity in White-Hot Online Video Space

Cloud-based video platform provider Brightcove has filed to raise up to $50 million in an initial public offering (IPO). Rumors of an IPO have floated around Brightcove almost since the company's inception 7 years ago, but gained steam in the last year as the company hired Chris Menard as its CFO (who previously served as CFO of publicly-traded Phase Forward). Given the choppiness in the public markets, it's not clear when the offering will occur, but when it does Brightcove will give investors a rare pure-play investment opportunity in the white-hot online video space.

Brightcove's S-1 reveals the company has nearly 3,300 customers in 50+ countries, including The New York Times Company, Oracle, Showtime, Philips Electronics and Macy's. Revenue in the first 6 months of 2011 were $28.4 million, up from $20.3 million in the first 6 months of 2010. Brightcove's net loss was $17.8 million in 2010 and $9.7 million in the first 6 months of 2011. The company has raised nearly $100 million to date and cash on-hand exceeded $24 million on June 30th.

Brightcove delivered approximately 700 million streams per month in the first half of 2011, up 72% from the first half of 2010, which it believes makes it the leading OVP. Brightcove's customers now reach 165 million+ unique viewers per month. Brightcove had 288 employees on June 30th. The flagship "Video Cloud" online video platform has generated all of the company's revenues to date; "App Cloud," the company's second service was announced in May.

For investors, Brightcove will be a rare pure-play way to tap into the exciting growth trends around online video. Though there has been a huge wave of industry consolidation over the past two years, particularly among smaller OVPs, public investors have had few direct ways to invest in the sector (exceptions include KIT Digital, NeuLion, blinkx and Chinese sites Youku and Tudou, plus those companies that have some part of their businesses tied to online video such as Google, AOL, Yahoo, Netflix, Demand Media and publicly-traded CDNs like Akamai and Limelight). In addition, Hulu had its IPO plans dashed due to lack of confidence in its content agreements, and more recently Envivio postponed its IPO due to market conditions.

This scarcity, plus Brightcove's market position and online video's positive growth trends all suggest that, notwithstanding the market's volatility, Brightcove's IPO is timely. And if it goes well, then no doubt we'll see a slew of other online video companies also follow the IPO path.

(Note: Brightcove is a VideoNuze sponsor)

Categories: Deals & Financings

Topics: Brightcove