IP Video Gear Vendor Envivio Files For $69 Million IPO - Multichannel

IP Video Gear Vendor Envivio Files For $69 Million IPO

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Envivio, which sells IP video encoding and processing equipment to cable and telecommunications operators and content providers worldwide, filed to raise up to $69 million in an initial public offering.

South San Francisco, Calif.-based Envivio has more than 220 end customers in more than 50 countries, the company said in an S-1 registration statement filed with the Securities and Exchange Commission on April 15.

"We enable service providers and content providers to deliver linear broadcast and on-demand video services to their customers via multiple screens, such as tablets, smartphones, netbooks, laptops, PCs and TVs," Envivio said in the filing.

The company warned prospective investors that it has incurred significant losses since its inception, including a net loss of $2.5 million on revenue of $30.0 million for the fiscal year ended Jan. 31, 2011. As of January 31, 2011, Envivio had an accumulated deficit of $79 million, losses the company attributed to costs incurred for R&D and sales and marketing.

Competitors cited by Envivio were Harmonic, Inlet Technologies (recently acquired by Cisco Systems) and RGB Networks (which bought RipCode in 2010). "Due to the evolving competitive landscape and growing market opportunity, we expect to encounter direct competition in the future from one or more larger traditional network infrastructure providers that may currently be one of our systems integrators," Envivio said in the filing.

Envivio was founded in 2000 by a group of engineers from France Telecom, including current president and CEO Julien Signès, 41.

As of Jan. 31, 2011, it had 117 full-time employees, including 56 in research and development, 41 in sales and marketing and 20 in general administrative and HR. Envivio's R&D activities are exclusively conducted in the metropolitan area of Rennes, France, "which we believe provides us access to highly qualified engineers on a cost-effective basis located in what has traditionally been viewed as a top broadcast center of Europe," the company said.

In fiscal 2011, three customers -- unidentified channel partners of Envivio -- directly accounted for 11%, 12% and 12%, respectively, of total revenue. For the year ended Jan. 31, 2011, 23.3% of Envivio's revenue was from sales to customers in the U.S., with 24.1% from the Asia Pacific region and 43.6% from Europe, the Middle East and Africa.

Envivio also said it currently has eight issued U.S. patents and five issued European patents, plus four patent applications pending in the U.S. and one patent application pending in Europe. In addition, the company has rights to rights to 12 patents licensed by France Telecom.

The IPO's lead underwriters are Stifel, Nicolaus & Co. and Piper Jaffray & Co.