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Streaming device maker Roku is considering an IPO this year, according to a Bloomberg report. The company apparently hasn’t selected a lead banker for the offering yet, and Bloomberg quoted unidentified sources with knowledge of the matter saying that the company hasn’t made a final decision on a public offering yet.
Roku is best known for its streaming boxes, which the company sells for as little as $50, and which directly compete with Apple’s (S GOOG) Apple TV as well as with Google’s (S GOOG) Chromecast. The company recently expanded its offering by striking partnerships with Hisense and TCL. Both companies are set to introduce TV sets with Roku’s smart TV platform in the coming months.
Roku said in early January that it was “just shy of 8 million Roku players sold in America.” The company also sells hardware in Canada and the U.K., where it struck a partnership with pay TV provider Sky to distribute Sky-branded Roku hardware. Sky’s owner News Corp. is amongst Roku’s investors; the company has raised a total of $127 million in funding from News Corp., Menlo Ventures, Globespan Capital Partners, Netflix (S NFLX) and others.
A number of companies, including Amazon and Intel, (S INTC) looked to acquire Roku in the past. Both of these companies went on to build their own TV hardware, and Amazon (S AMZN) is looking to launch its Roku competitor next month, according to a Recode report. In the long run, it could prove to be challenging for Roku to compete with giants like Amazon, Apple (S AAPL) and Google, all of which have other ways to monetize their TV devices.
Roku has been trying to build out its services business and is now offering content publishers a way to bill viewers for their apps. Roku CEO Anthony Wood told me at the end of last year that services are the fastest growing part of Roku’s business, but I’ve heard considerable skepticism from publishers, many of who would rather own the billing relationship with their customers and offer them access across multiple platforms.