Digital transformation has been one of the big enterprise themes of 2020: Organizations are doubling down on cloud services both to link up suddenly remote teams and centralize apps, documents and data in a more efficient way. Today, one of the start...
Vimeo raises $150M, while IAC is ‘contemplating’ a spin-off
Vimeo has raised $150 million in new equity funding, announced in conjunction with the third quarter earnings of its parent company IAC.
In a letter to shareholders, IAC CEO Joey Levin said the company has “begun contemplating spinning Vimeo off to our shareholders.”
“Given Vimeo’s success, and investor adulation for the Software-as-a-Service (SaaS) category generally, we expect Vimeo’s access to capital inside of IAC will be much more expensive than access to capital outside of IAC, and that capital will be helpful to enable Vimeo to achieve its highest ambitions,” Levin continued, adding, “We just tested Vimeo’s ability to access capital with a small private fundraise to bolster Vimeo’s balance sheet and to repay capital to IAC.”
Over the summer, Match Group (which owns a variety of dating services, including Tinder) completed its separation from IAC, with IAC’s ownership distributed to IAC shareholders.
Vimeo, meanwhile, has shifted its focus over the past couple years — instead of trying to compete with YouTube as a consumer video destination, it sells video tools to enterprises and other businesses. For example, it recently launched a free video messaging product called Vimeo Record.
The company says it has 1.5 million paying subscribers and more than 3,500 enterprise clients, including Amazon, Starbucks, Deloitte, Zendesk, Rite Aid and Siemens.
The new funding comes from Thrive Capital and GIC. According to the earnings report, in Q3, Vimeo grew revenue by 44% year-over-year, to $75.1 million. And it had its first quarter of positive EBITDA — $3.4 million.
“Our goal is to radically simplify how businesses create and share video, with tools that are far more intuitive and cost-effective than they’ve been historically,” said Vimeo CEO Anjali Sud in a statement. “We’re energized to access additional capital to pursue this enormous opportunity with the full focus and scale of the Vimeo platform.”
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