Despite tremendous volatility in world financial markets, online video software provider Brightcove has decided to press ahead with a $50 million IPO. In the SEC filing, the company said it had nearly doubled its revenues last year, though it had a $17.8 million net loss, which is not likely to narrow this year.
The company ended 2010 with $43.7 million, a 78.4 percent increase over the previous year. As for the losses, in the first six months of this year, the company was in the red to the tune of $9.7 million. It expects the losses to continue at least through the end of 2012.
Brightcove has been working on expanding its online video platform by building apps for smartphones, tablets, social networks and TVs. In May, Brightcove CEO Jeremy Allaire introduced a new product/service suite, the Brightcove App Cloud, which lets developers write, publish and analyze apps, as part of a unified system intended to capitalize on the growth of social media and connected devices.
Earlier this year, AOL (NYSE: AOL) revealed that it had sold its shares in Brightcove for $17 million in cash in Q4, as it sought to find some savings in the middle of a major shopping spree. The stake in Brightcove stemmed from a $16.2 million round the video company raised back in 2005 from AOL, IAC (NSDQ: IACI) and Hearst.
The timing of Brightcove’s filing comes as many other companies looking to go public have been feeling a little gunshy. While there have been 96 IPOs this year, according to an AP item, citing Renaissance Capital’s tally, Dealogic identified 17 deals have been either suspended or completely abandoned in August. That’s the highest number of IPO withdrawals since December 2008, when 18 offerings were rescinded.
To be sure, most stocks have been hit hard since the stock market went haywire, following Standard & Poor’s downgrade of the U.S.’s debt rating. That volatility partly explains the quick rise and fall of widely anticipated filings from Pandora (NYSE: P), which saw a nearly 20 percent drop in its stock from its filing date, and LinkedIn (NYSE: LNKD), which erased about 26 percent of its share price from its early peak. But it also reflects wider uncertainty about these companies’ ability to reach and maintain profitability amid the threat of a double-dip recession.
Nevertheless, Groupon is still expected to file its IPO in the next few weeks. Certainly, these companies are not looking at the short term stock movements, but are considering the proposition ahead for dominating their respective areas of digital music distribution, social networking, daily deals and, in Brightcove’s case, the importance of cloud storage and video that is not bounded by a particular device (i.e., the PC vs. mobile vs. TV) and is instead managed across a variety of technologies and outlets.