Posted on Friday, Jun 26th 2015
Recent market reports on the open source software market estimate that there was a 140% growth in the interest in purchasing open source software over the last four years. Overall the market saw $2 billion in open source software sales back in 2013. As interest in open source tools increases, companies like Kaltura are seeing tremendous growth making them strong contenders of the Billion Dollar Unicorn club.
New York-based Kaltura was founded in 2006 by Ron Yekutiel, Dr. Shay David, Dr. Michal Tsur, and Eran Eta who realized the need of an easy and low-cost way to collaborate online via video and other rich media. With their entrepreneurial backgrounds, the founders were able to identify that their free platform would be adopted across verticals. They set up Kaltura as an open-source video platform to improve the capability of websites to provide customized video, photo, and audio functionalities. It allows customers to download their client and server code and use their functionality for free. Customers can self-host the content on their own servers and use their own Content Delivery Network (CDN) services, should they choose to. Today, they have become the world’s leading open-source video management project and boast over 100,000 community members.
The platform helps organizations deploy applications for video creation and management in a simple, yet effective manner. Kaltura’s platform includes a Management Console which is a media management system that helps manage, publish, distribute, monetize, and analyze video and audio media. To leverage the growing social space, they offer MediaSpace, which is a portal that helps create the developer’s own Campus or Corporate YouTube. They also have a mobile offering that extends the features of social video portal to users on mobile devices. They also successfully offer video plugins for Jive, IBM Connections, Drupal, and WordPress that simplify the ability to let users integrate online video features into WordPress.
Kaltura operates on the traditional open source model where the access to the platform is free, and revenues are generated through services provided. They do not disclose their financials, but as of 2013, they were trending at revenues in the range of $25-$50 million and were on the verge of becoming profitable. Their customers include names like HBO, ABC, Bank of America, Intel, Harvard, and NYU.
They have been venture funded so far with $116.1 million raised from investors including Luminari Capital, .406 Ventures, Gera Venture, Intel Capital, Nexus Venture Partners, Sapphire Ventures, Avalon Ventures, ORIX Ventures, Mitsui & Co. Global Investment, and Silicon Valley Bank. Their last round of funding was held in February 2014 when they raised $47 million at a valuation of $250 million. They are expected to be evaluating an IPO soon and some analysts estimate that they are already worth more than $1 billion. Well, perhaps, in the private market, if they raised additional financing today, they would indeed be valued at over a billion. However, whether the public market will withstand that valuation remains to be seen.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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What is Okta's Inorganic Growth Narrative?