IAC’s Video Platform Vimeo Raises $150 Million From Thrive, GIC
(Bloomberg) -- Barry Diller’s IAC/InterActive Corp. said ts online video platform Vimeo raised $150 million from Thrive Capital and Singapore’s sovereign wealth fund GIC, valuing the unit at $2.75 billion.
The capital will be used to fund investments in research and development, sales and international expansion, the company said in a statement Thursday. IAC is also considering spinning the unit off to shareholders.
“Fourteen years ago, we acquired Vimeo as part of a small collection of assets for very little capital, and through the creativity, grit, and sheer talent of a group of leaders at Vimeo, the business has become a real leader in a large and growing market, and in control of its own destiny,” IAC Chief Executive Officer Joey Levin said in the statement.
In remarks to shareholders, Levin said spinning Vimeo off would give it access to less-expensive capital than what it can tap being part of IAC. That access would be “helpful to enable Vimeo to achieve its highest ambitions,” he said, and be used to hire employees, invest in research and development or make acquisitions.
IAC, a media and internet company with more than 150 brands and products, acquired Vimeo in 2006 as part of the deal to purchase comedy website CollegeHumor. Vimeo has since become a top performer in the conglomerate’s portfolio of companies, which includes HomeAdvisor and The Daily Beast. Diller, a 78-year-old billionaire media mogul, is IAC’s chairman.
The investment coincides with a surge in demand for Vimeo’s software as businesses shift to online platforms amid the pandemic. Vimeo’s customers include Amazon.com Inc., Starbucks Corp. and Deloitte LLP. According to results published by IAC Thursday, Vimeo reported a 44% increase in third-quarter revenue from a year earlier. Vimeo has tapped into the increased popularity of digital-video platforms with its video production, live event streaming, and marketing and analytics tools. In 2017, the company scrapped plans to create a Netflix-like on demand video service and pivoted away from original content.
Vimeo’s success underscores IAC’s strategy of acquiring small private online companies and growing them through a series of acquisitions before spinning them out. In July, IAC spun off Match Group, which had grown into the biggest dating app provider and counts Tinder, Hinge and OkCupid among its brands. IAC also recently invested $1 billion for a 12% stake in casino operator MGM Resorts International.
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