Application for a U.S. initial public offering was filed by Roku Inc., the maker of devices and software for streaming video that was an early challenger to traditional home-entertainment providers.
Noting that the proposed value of the offering is a placeholder used to calculate fees and will probably change, the company listed an initial offering size of $100 million. According to a filing Friday with the U.S. Securities and Exchange Commission, the company plans to use the proceeds for general corporate purposes including research and development and marketing.
The market that Roku operates in is a crowded market of home devices and streaming tools and the company was an early mover I that market. Several technology giants, including Apple Inc., Alphabet Inc.’s Google and Amazon.com Inc., are now focusing intently on that market and the company is considered to be a specialist in that industry.
According to its regulatory filing, the risk of the “highly competitive” market was acknowledged by the company which has been losing money since it began in 2002. The company’s advantage is in its neutrality, Roku said even while competitors may be able to afford to lose money on their devices. Roku isn’t competing with content providers by making original programming unlike some of the other players.
“Our mission is to be the TV streaming platform that connects the entire TV ecosystem,” Chief Executive Officer Anthony Wood wrote in the filing.
Compared with $9.28 at the end of 2016, it made $11.22 in average revenue per user in the four quarters ended on June 30, the company said. The company makes money when consumers order a streaming-video service, or through advertising deals and it said that its growth strategy is to increase the number of active accounts and the amount of revenue it makes per user. About 40 percent of total sales of Roku is made up of ads and subscription-revenue share.
According to the filing, as of June 30 of fiscal year 2017, Roku had 15.1 million active accounts using its streaming services. And noting a 23 percent increase from the same period in 2016, Roku had revenue of $199.7 million for the six months ended June 30, according to the filing.
The offering will be listed on the Nasdaq Global Select Market under the symbol ROKU and Morgan Stanley and Citigroup Inc. are leading the offering. Class A shares would be offered by the company. venture capitalists and current and former executives in tech and media are among the company’s seven non-employee directors.
(Adapted from Bloomberg)