Roku is working with investment banks to prepare a confidential IPO filing, according to a Wall Street Journal report. The Journal noted that Roku could raise as much as $150 million by going public, but added that there is no word on the timing of such a filing or the valuation Roku may be looking for.
Roku disclosed a $25 million round of financing earlier this week, and the company’s CEO Anthony Wood told the Information a few weeks back that his company had $190 million in revenue in 2013. The company has said that it has sold more than 10 million players in the U.S. since its launch.
Roku is currently embarking on two major bets that could determine the company’s success with investors if and when it goes public. It partnered with TV makers Hisense and TCL to bring a line of Roku-powered TV sets to market, and it has been working hard to strike deals with app publishers to get a share of any ad or subscription revenue they are making on the platform. Wood told the Information that Roku could make more money with services than with ads within the next 12 to 18 months.
With an IPO on the table and a new infusion of $25 million in the bank, I expect Roku to spend heavily on marketing in stores as well as through billboards and maybe even TV ads this holiday season. Roku is facing increased competition from Google and Amazon, and it will have to prove to investors that the company can still grow its traditional device business, and score in the TV space, even as it competes with Chromecast, Fire TV and Android TV.