Roku Prepping for IPO – WSJ, NYT

Following on the heels of a new $25 million private funding round discovered last week, Roku now appears to be gearing up secretively for a much larger initial public offering.

According to reports by The Wall Street Journal and The New York Times, Roku Inc. is preparing to file confidentially for an IPO that could raise as much as $150 million. On top of the money the company has already raised privately, that would double Roku's funding total to roughly $300 million. The Wall Street Journal wrote that Roku has been working with several investment banks on IPO preparations, including Bank of America, Merrill Lynch & Co. Inc. and Citigroup . (See Playing Catchup With CES and Roku Raises $25M, But for What?)

Roku hasn't shared many details on why it's building up its cash reserves, but the company is exploring several new business models that could benefit from the additional funding as it competes against a growing line-up of major rivals in the media streaming market. In the retail channel, Roku has worked with hardware manufacturers, such as Hisense Optoelectronics Technology Co. Ltd. and TCL, to introduce Roku-powered TV sets.

Want to know more about OTT services? Check out our dedicated OTT content channel here on Light Reading.

In the service provider market, Roku recently announced it has launched a white-label program bundling its hardware and software in a package set for cable and telco TV operators. Sky , already a major Roku investor, has been using Roku media players for its Now TV streaming video catchup service since the end of 2012. (See Roku Pursues Pay-TV Providers.)

New money for Roku might also suggest that the company has plans to pursue more content for its streaming media platform. While good content is expensive upfront, it can also be lucrative on the back end, thanks to revenue-sharing agreements.

— Mari Silbey, special to Light Reading

Liz Greenberg 10/28/2014 | 11:43:18 PM
Re: Competitive threat You may be right but then there is two other Goliaths called Samsung and Google once we start talking about Internet capable TVs.  It should be a fun fight to watch.
pcharles09 10/28/2014 | 8:31:43 PM
Re: Competitive threat @Mitch W,

Do you think Chromecast & the Amazon competitor will put a dent in Roku's margins?

I was thinking about getting a ROku but the Chromecast looks good too.
Mitch Wagner 10/28/2014 | 7:51:22 PM
Re: Competitive threat Liz, I quite agree. We're pretty heavily invested in Apple at our house. We have an Apple TV in addition to our other iGear. But we also have a Roku, and I prefer that.

I'm not saying Roku is doomed. Just that they face powerful competition, and they -- and all the other OTT video boxes and dongles -- are having a tough time differentiating themselves. 

My $0.02 is that it's a two-way race between Roku and Apple and Apple's chief strength isn't its technology. It's the brand, and its deep financial chest that it can use for marketing. If Apple decides to treat Apple TV as more than just a "hobby," then Roku is going to face a real fight. 
Liz Greenberg 10/27/2014 | 9:29:09 PM
Re: Competitive threat Mitch not everybody is in love with Apple and everything it does.   Roku represents an independent approach that is not tethered to any telephone.  I can send one to my father, he can hook it up and voila, internet video streaming without leaving his basic phone for one that he cannot operate.  I really hope that they succeed as many people need a solution that is independent of both their TV and phone.  Over time this will shift, but for the present, it is a really useful option.
Mitch Wagner 10/27/2014 | 2:36:37 PM
Competitive threat Roku faces several serious competitive threats, chiefly from Apple. I wonder if the cash infusion can help Roku fend the threats off. Certainly all the set-top boxes and dongles now available look similar from a feature perspective. 
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