RGB Rides HD Wave To $100 Million
Video-Equipment Vendor Sales Surpasses Plateau Despite Spending Cutbacks
By Todd Spangler -- Multichannel News, 4/19/2009 10:01:00 PM MT
Video-equipment vendor RGB Networks has continued to grow -- despite spending cutbacks at cable operators -- having passed $100 million in sales to date at the end of 2008.
RGB CEO Jef Graham said the company is on pace to boost sales 50% this year, to reach around $60 million, a growth rate he attributed to cable's ongoing expansion of high-definition programming.
"We're pleased we can perform like this particularly in this economic environment," Graham said. "You're no longer a ‘startup' when you get to this stage."
Since it began shipping product at the end of 2005, RGB has delivered 6,000 encoders and other video-delivery systems to 140 customers in 24 countries.
RGB's biggest customer is Time Warner Cable, which represented 30% of sales in 2008, Graham said.
Approximately 25% of revenue was non-U.S., he added.
Products for delivering HD drove RGB's business, accounting for roughly 70% of sales. About 20% was related to ad-insertion capabilities and the remaining 10% has been for video-on-demand services.
RGB had around $40 million in sales last year, after generating $31 million in 2007, $18 million in 2006 and $7 million in 2005, according to Graham.
Based in Sunnyvale, Calif., RGB now has 160 employees.
Graham, who last year had been looking at a potential initial public offering in mid-2009, said an IPO would probably not be in the cards until next year at the earliest.
"There's no real need for us to drive public," he said. "It's an exit, but what we'll do is stay as a private company longer and basically execute and grow our cash position."
Last April, RGB raised $20 million in fourth-round funding, giving it a total of $57 million raised. Investors include Institutional Venture Partners, Accel Partners, Comcast Interactive Capital, Kleiner Perkins Caufield & Byers and Focus Ventures.
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