Tuesday, February 07, 2012

You Down With O.V.P. (Yeah You Know Me) -- Or, A Tale of Two $300 Million Exits

Lots of activity in online video platform (OVP) land, as investors' quests for exits heats up. The pitch is inspired by Naughty By Nature's classic early '90s song, "O.P.P." (lyrics here) and its memorable chorus echoed in my headline. (By the way, for you trivia fans interested in what O.P.P. means, check out Wikipedia).

First, as you all likely saw, the OVP world's original gangsta' -- Brightcove -- just filed its amended S-1 in preparation for its upcoming IPO. The company, which ended 2011 with $63.6 million in revenues, hopes to raise up to $70 million at a valuation somewhere in the $300 million range (which represents about a 5X multiple on trailing revenues).

Second, from the "Somewhat Surprising Move" department, Barry Diller's IAC is looking to sell a significant share of rival OVP old-schooler, Vimeo. Vimeo targets a very different market than Brightcove, and apparently -- and very surprisingly -- only generates $5 million in revenues. Yet, despite this huge revenue gap between itself and Brightcove, Vimeo values itself at $300 million as well. Hmmm, let me do the math here -- that's a fairly healthy 60X multiple.

Expect more OVPs seeking exits throughout the course of the year in one shape or form. And, don't be surprised if one of those is Brightcove's biggest rival --- Ooyala. Not original gangstas. But, their moves make them rise with a bullet on the charts. Ooyala v. Brightcove is a classic case of West Coast v. East Coast rap -- Silicon Valley (at least, originally) v. Boston -- yo! (As in OVP IPO, yo!)

One more thing -- if you want to see a train-wreck of Founder behavior, read the comments to the Vimeo post by Vimeo founder -- unbelievable that a Founder would act this way at any time, let alone in a public forum like that! Sad, sad, sad ....