- General
- November 5, 2020
- 5 minutes read
Vimeo Taps Outside Funding
Anjali Sud, CEO, Vimeo.Photo credit: Hubert Burda Media, licensed under CC BY-NC-SA 2.0 Vimeo, the popular video site owned by tech conglomerate…
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| Anjali Sud, CEO, Vimeo. Photo credit: Hubert Burda Media, licensed under CC BY-NC-SA 2.0 |
Vimeo, the popular video site owned by tech conglomerate IAC, has tapped $150 million in outside funding from investment firms Thrive Capital and GIC that it says it’ll put towards R&D, sales, and international expansion. The equity investment places Vimeo’s valuation at $2.75 billion and could pave the way for a spin-off of the company from IAC on the public markets.
Vimeo is one of IAC’s best-performing assets and grew its revenue 44% year-over-year in the third quarter of this year. The company offers a suite of video tools that’s adopted by over 3,500 enterprise customers and 1.5 million individual paying users.
With its new capital, Vimeo will work to boost its business and pave the way for a possible spin-off of what counts as one of IAC’s most valuable assets. Vimeo, as it is, was acquired by IAC 14 years ago as part of Connected Ventures, the parent firm of popular comedy content company CollegeHumor. Vimeo then was a side project that was created to share comedy videos and had a small user base.
It happened that Vimeo was acquired by IAC around the same time YouTube was acquired by Google, leading IAC to invest in its development as a competitor to YouTube. Since then, Vimeo has grown rapidly although nowhere near the scale of YouTube. Unlike YouTube, Vimeo makes money by providing subscription plans for video content producers and offering video editing and broadcast tools for a fee rather than run ads.
Vimeo has grown to become a key asset for IAC and has now drawn interest from outside investors. Backed by new outside capital, the company plans to make deeper investments in product development, sales, and international expansion.
The new outside investors in Vimeo will surely come knocking for returns on their investment in future time so it leaves the possibility that Vimeo could be spun off on the public markets just like IAC has done to a handful of its successful brands in the past.
