London-based start-up Rightster revealed plans yesterday to raise between £10 million and £15 million on London Stock Exchange’s Alternative Investment Market (AIM) in a move that follows a string of initial public offerings (IPOs) in the UK.
The funding – set to be raised between October and December – would be used to help the firm develop its online video management platform, which helps companies distribute and market online video content around the web.
British serial technology entrepreneur Charlie Muirhead founded Rightster two years ago, after setting up other software firms such as Nexagent and Orchesteam – the latter being launched when Muirhead was just 19. Rightster now manages 450 multi-channel networks on YouTube and counts The Press Association, The Guardian and Condé Nast among its clients.
“An IPO will support an extremely exciting time in the company’s evolution as it prepares to roll out its second generation cloud-based software platform and expands the breadth and depth of its distribution network,” said Muirhead.
“Whilst our business is global in nature, we’re very proud of our UK heritage. We believe an AIM listing could provide us with the access to funds needed to scale the business to reach its full potential, while maintaining its independence.”
Rightster has forecast annual revenues of £14 million for the current financial year but if it raises £15 million on the UK’s junior stock market then it will be valued at £50 million.
Earlier this year Rightster acquired leading movie distributor Preview Networks to bolster the start-up’s position in the streaming video market.
Online video companies such as Rightster are receiving more interest as the number of people watching video on the web increases and advertisers start to realise the potential for running digital ads alongside online video content. Indeed, Informa predicts that the global online video market will grow to $37 billion (£24 billion) by 2017.
Rightster’s decision to IPO comes just a couple of weeks after web domain provider CentralNic announced it was listing on AIM to raise £5 million to help it secure the next generation of web addresses, such as .college and .wiki. Other tech companies such as health app CloudTag and domain name provider Daily Internet also took to AIM to raise money this year.
However, analysts have warned that these are relatively small IPOs and that UK start-ups often turn to more attractive US markets, such as NASDAQ, to raise larger sums of money.