After a brutal year for big-name IPOs like Snapchat and Blue Apron. Roku, one of the first video-streaming boxes to help set cord-cutting in motion, is braving Wall Street, going public on Thursday with a valuation of over a billion dollars. And it's got the added challenge of being a hardware maker in a market that's not taken kindly to many of them, says Reuters reporter Leana Baker.
>> Roku is still an unprofitable company, and they haven't said exactly when they will become profitable. And some investors may be scared off by the performances of GoPro and Fitbit, which were two hardware IPOs in the past few years. Roku though knows about that, and is trying to pivot itself and present itself as a company that sells ads, that has a platform that takes a cut of revenue on its streaming service.
And actually, almost half of its revenue is now coming from these non-hardware sources, so that story is playing out.>> The initial public offering comes as competition for these video streaming devices heats up. There's Apple TV, Amazon Fire TV, Google Chromecast, and many more smaller players. But those who prefer Roku to its rivals, point out that the platform has been open to carrying more TV apps including Amazon Prime video.
Apple TV for example, only recently announced plans to support Amazon's video offerings. Roku has 15 million monthly active users at the end of June, and accounted for nearly half of all video streaming devices in the US last year.>> There haven't been many tech IPOs this year. Roku is only a fraction of the size of Snapchat, but investors will be watching to see whether the market is receptive.
Blue Apron was another high profile one that didn't do well. So Roku is really tying to back the trend.>> Roku was conceived by Anthony Wood, the inventor of the DVR, while he was working at Netflix, although Netflix doesn't have a stake. The video streaming platform is also home to Netflix, Hulu, Google Play, and Reuters TV.