Brightcove IPO: The Top Player In Web Video Monetization
Brightcove ( BCOV ) provides a video content platform for organizing, publishing, monetizing and monitoring performance of video and rich media assets across all types ofdevices, networks, software environments and applications.
The company was launched in 2005, and thanks to raising capital of $90M from both venture and strategic investors, has been able to build itself into strong market position. Its customer base is largely at the high end and includes household names in media and entertainment, broadcasting, and large corporations.
Brightcove was founded and is managed very much as a technology company, with an on-demand and usage based business model. In the last two years it has added some new products that target smaller customers and provide for some level of self-service. Its latest efforts to address more technical elements of the multimedia applications that include video are a good example of how Brightcove tends to focus on technology innovation.
Historical revenue growth has been slower than we originally thought. Heavy spending on sales and marketing is needed to drive sales but has resulted in substantial operating losses. Our intrinsic value estimate of $13 is based on a long-term model of moderate growth with rapidly improving margins.
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