Brightcove files for IPO, expects to raise $50M

The video publishing company is taking a bold step as the global economy reels from recent hits

The stock market has been feeling a little less than fresh in recent weeks as the U.S. credit rating has taken a hit and Europe deals with a crisis of its own.  Consequently, a number of companies that have filed for IPOs in recent months appear to be rethinking whether now is the best time to make a splash in the public money pool.  So, Brightcove, which announced today that it has filed for an IPO, could be taking a bit of a risk.

The cloud-based video publishing company, which will be debuting on NASDAQ under the symbol “BCOV,” hopes to raise $50 million in the offering. 

As for Brightcove’s financials, it’s been seeing steady revenue growth over the last several years.  In December 2008, the company took in $24.5 million, and as of December 2010, that number has grown to $43.7 million (not the explosive revenues we’ve seen in other recent filings from companies like Groupon and Zynga, but you know what they say: slow and steady…something something). 

Meanwhile, its customer base has grown from 549 in December 2008 to 3,295 worldwide, as of June 2011.  Brightcove’s customers hail from over 50 different countries and include some of the biggest names in media, retail, electronics, and government organizations, including The New York Times Company, Oracle, Showtime, Philips Electronics, Macy’s, Honda, Bank of America, and the U.S. Army.

Despite that growth in customers, however, Brightcove hasn’t yet turned a profit.  In 2010, the company incurred a loss of $17.8 million, compared to 2009, when it suffered a loss of $2.8 million.  And it’s currently on track to take a larger loss this year.  As of June 2011, Brightcove has already lost $9.7 million, compared to the same time last year, when it lost $8.5 million.

Brightcove explains: “These losses were due to the substantial investments we made to build our products and services, grow and maintain our business and acquire customers. Key elements of our growth strategy include acquiring new customers and continuing to innovate and build our brand.”

As a result, the company expects to continue to incur losses over the next year, at least until the end of 2012.

But it also has a couple of points in its favor.  The market for on-demand digital content publishing is growing: most consumers are now equipped with Broadband, the cost of creating professional video content has dropped steeply, and video content consumption has become a staple of the Internet diet.  To meet that need, some companies have turned to video sharing sites like YouTube, or in-house solutions, neither of which is completely efficient, Brightcove explains. 

To fill the gap, Brightcove debuted its flagship product, Video Cloud, which allows for highly configurable and scalable professional video publication and distribution.  Brightcove took it a step further in May 2011 with the unveiling of App Cloud, which will allow customers to publish and distribute video through software applications across a wide range of Internet-connected devices.

One of Brightcove’s competitors, Ooyala, is also on the move, having raised $22 million in September 2010 for its own online video publishing and distribution service.