Roku Files for IPO, Seeks to Raise $100M

Anthony Wood Roku - One Time Use Only - Getty - H 2017
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The company behind set-top streaming boxes said it was looking to raise up to $100 million from its public debut.

Roku has filed for an initial public offering in which it will seek to raise as much as $100 million, according to a document submitted to the Securities and Exchange Commission.

The streaming media company, which makes television set-top boxes and other similar devices, plans to list on the Nasdaq under the ticker symbol ROKU.

The filing also reveals that Roku had 15.1 million active accounts during the second quarter this year, representing growth of 43 percent from the same period last year. The Los Gatos, Calif., company lost $42.8 million in 2016 and had nearly $399 million in revenue for the same period, up 25 percent from 2015.

Roku says that its users streamed more than 6.7 billion hours of programming on its platform during the first half of 2017, a 67 percent increase in streaming time from the same period a year earlier.

"Our mission is to be the TV streaming platform that connects the entire TV ecosystem," CEO Anthony Wood said in a letter included in the SEC filing. "I believe that just like mainframe operating systems didn't transition to PCs, and just like PC operating systems didn't make the transition to phones ... TVs will be powered by a purpose-built operating system optimized for streaming."

Since launching its first device in 2008, Roku has become a market leader for devices that help people stream content directly through their televisions. The company currently offers a range of set-top boxes and streaming sticks at price points that range from $30 to $110. In addition, it sells connected television sets, Roku TVs, through partners such as TCL and Sharp.

Roku's has always been an agnostic platform, giving consumers the choice of which apps they want to download. The company says that Netflix accounted for about one-third of all hours streamed during the first six months of this year, but that revenue generated from Netflix was not material to its overall financial performance during the period. Roku does make money by sharing advertising revenue with some of the apps it carries.

As the streaming industry has grown over the last several years, so has Roku's business. Initially, the company carried only Netflix, but it has since expanded to offer over 5,000 apps that have sprung up as television networks and new media companies alike look to capture a piece of the growing streaming video market. More than 50 million homes in the U.S. have used an over-the-top streaming service, according to a comScore report that Roku cited in its filing.

A Roku IPO has been expected for some time, and reports surfaced earlier this summer that the company had hired Morgan Stanley, Citigroup and Allen & Co. to underwrite the transaction with plans to go public by the end of the year. The SEC filing reveals that RBC Capital Markets, Needham & Co. and William Blair are also underwriting the IPO.

Roku has previously raised more than $200 million from investors such as News Corp, Viacom, Sky and Hearst.