Video system vendor Edgeware AB is preparing for an IPO on the Nasdaq Stockholm exchange next week that is set to value the company at up to 885 million Swedish kronor (US$96 million).
The vendor, which sells hardware and software that enables the delivery of video content over IP networks, is set to become a public company on December 9, with the ticker "EDGE." The gross proceeds for the company from the listing (before IPO-related costs) are expected to be around SEK150 million ($16.2 million): The company says the money raised will be used to "expand its sales organisation, conduct selective acquisitions and strengthen its balance sheet."
"The market for TV and video streaming is expected to continue growing rapidly and in recent years we have received several break-through orders with large operators, broadcasters and content owners worldwide," noted Edgeware AB CEO Joachim Roos in a public statement about the IPO. "We have good opportunities to further advance our position and help our customers to deliver amazing TV with our unique solution."
Edgeware has been selling to telcos, cable operators, broadcasters and content owners since 2004. It has developed what it calls a "decentralized content delivery network (CDN)" that enables video content to be streamed from the edge of the network, closest to the user. (See Edgeware Bows New CDN For TV, Edgeware Enables IP Video Delivery Network Interop Testing, Edgeware Signs Up Cincinnati Bell and Edgware Signs Up Com Hem for D-VDN.)
As the company notes, the "decentralised system ensures a high level of quality and delivery reliability and reduces the traffic load in the backhaul network." That's an approach that will resonate with network operators of all types as they plan for an increasingly cloud-enabled, 5G world and explore the potential gains of so-called fog networking, whereby IT and networking assets are distributed in a coordinated way from the central data center to the very edge of the network. (See Broadband's Multidimensional Shift & Why It Needs to Embrace the Cloud and Will ETSI Lose Its Edge as Fog Rolls In?)
It appears to be resonating right now with video service providers, though only to a certain degree: Edgeware has been growing its sales since it was founded in 2004 yet its net revenues for the 12 months to the end of September 2016 were just SEK232 million ($25 million), though it does boast an enviable gross margin of 69%.
The vendor believes there are plenty of new business opportunities and intends to use its IPO proceeds to accelerate its growth by doubling the size of its sales team, expanding geographically, making strategic acquisitions (it has already identified some targets) and leveraging its stronger financial position to "undertake larger and more complex business transactions with customers and partners around the world."
Greater firepower and a seat at two of the hottest tables in the business (video content delivery and intelligent distributed networking) suggest Edgeware will likely ramp up in the coming years.
— Ray Le Maistre, , Editor-in-Chief, Light Reading