[Funding alert] Vimeo raises $300 M ahead of its separate spin-off

Video software company Vimeo, listed as IAC on NASDAQ, has raised $300 million in primary equity from funds and accounts advised by T. Rowe Price Associates, Inc. and Oberndorf Enterprises, LLC at a valuation in excess of $5 billion.

The development follows the November 2020 announcement of the company’s $150 million equity raise and IAC’s plan to spin-off Vimeo into an independent, separately-traded public company.

The new investment occurred in two tranches, consisting of $200 million at a $5.2 billion pre-money valuation and $100 million at a $5.7 billion pre-money valuation. The capital will provide Vimeo with additional cash to accelerate its investments in growth, innovation, and talent.

In its statement, the company said that the company expects to complete the spin-off of Vimeo to IAC shareholders early in the second quarter of 2021.

Anjali Sud, CEO, Vimeo said, “As the world embraces video like never before, Vimeo is in an incredibly strong position to help more businesses take advantage of this powerful medium. We have built an industry-leading solution that the market needs, and we intend to move swiftly to bring our professional-quality tools to millions of more users.”

ALSO READ

COVID-19 and Indian economy - The good, bad, and ugly

Vimeo has more than 200 million users across over 150 countries with 1.5 million paying subscribers. Over a period of time, Vimeo has shifted its focus from a consumer video platform like Google's YouTube to a video tools platform for enterprises and businesses. 

In its funding announcement, the company said that the demand for Vimeo’s cloud-based software is seeing record growth among corporate and business customers such as Amazon, Starbucks, Deloitte, Zendesk, Rite Aid, and Siemens. In December, Vimeo saw its highest month of year-over-year revenue growth—57 percent—for all of 2020.

At the time of announcing spin-off in December, Joey Levin, CEO, IAC said that the combination of Vimeo's remarkable growth, solid leadership position, and enormous market opportunity have made clear its future and that it is time for "Vimeo to spread its wings and become a great independent public company".

The announcement read that the separation is expected to afford numerous benefits, such as the creation of "pure-play" Vimeo equity currency through which the company could more effectively raise capital as it aims to invest further in the product, technology, enterprise sales, and international expansion and pursue strategic acquisitions.