Brightcove’s IPO Prospects

Market reports estimate the outsourced online video platform market to be worth $5.8 billion by the year 2015. For 2011, the market is estimated to be worth $2.3 billion. A study by Cisco Systems revealed that Internet video will amount for 40% of all consumer Internet traffic worldwide during the year. By 2015, that percentage is expected to grow to 62%, making the online video market a booming one.

Brightcove’s Financials
Brightcove was founded in 2004 by founder Jeremy Allaire to deliver products needed to publish and distribute professional digital media. Today, the Brightcove Video Cloud is known to be the market-leading online video platform helping to deliver “exceptional media experiences” across connected devices including PCs, smartphones, tablets and connected TVs, to a client list of more than 3,300 customers spread across 50 countries.

Brightcove’s customer list includes media giants, The New York Times Co., The Boston Globe, The Weather Channel, and Condé Nast and other businesses including Oracle, AOL, Philips Electronics, Macy’s, Bank of America, the U.S. Army and Honda. They have raised $103 million in funding and has investors including Accel Partners, General Catalyst Partners, Brookside Capital, Maverick Capital among others. Last month, Brightcove filed for a $50 million IPO.

They ended last year with revenues of $43.7 million. For the first half of the current year, they reported revenues of $28.4 million, compared with $20.3 million reported a year ago. As is common these days, Brightcove is still unprofitable. Last year, they reported a loss of $17.8 million in 2010. For the first half of the current year, losses amounted to $9.7 million. The company does not expect to turn profitable by the end of 2012.

Brightcove’s Market Expansion
Brightcove is also diversifying outside the video content segment. Earlier this summer, they launched the Brightcove App Cloud, a mobile app development platform. The SaaS-based Brightcove App Cloud lets users create, maintain and distribute apps on iOS, Android and the mobile web. The apps go beyond video apps as they let users create HTML5 apps and mobile touch-based apps. The App Cloud creates an app template that can then be customized for deployment on the required platform.

Brightcove’s video stream views per month grew a whopping 72% over previous year to cross 700 million streams this summer. In absolute terms, that makes Brightcove the second-largest provider of video streaming after YouTube’s 3 billion average monthly video streams. This is a company to watch, particularly because of the massive growth in online video.