An SEC filing has revealed that video ringtone sharing community Vringo has filed to raise an estimated
$64.3 million $13.8 million via an initial public offering of stock and warrants.
The company plans to trade on NASDAQ, with Maxim Group serving as lead underwriter. Vringo shareholders include Warburg Pincus, who invested $12 million for a 31.9% ownership stake in 2007, and undisclosed private investors.
Update: the initial $64.3 million IPO figure was inaccurate. Dow-Jones News Service has filed a correction to its story on Vringo’s filing of a Form S-1 with the Securities & Exchange Commission. The correction makes clear that the funding target for Vringo’s proposed IPO is $12.0 million, with the potential to reach $13.8 million if an over-allotment of shares is exercised.
Vringo operates an online video ring tone sharing community, providing a hosted and client-server-based solution, which allows users to find, choose, create, and share video ringtones. The company provides mobile phone video sharing, and video ringtones and video download solutions. Its content includes licensed material from televisions, movies, and music videos, as well as user generated clips.
Vringo says its application, which is available for Android in beta, is compatible with more than 300 handsets.
According to the filing, Vringo’s product will soon no longer be offered for free to consumers. The company says it will move to a paid service model together with mobile carriers and other partners around the world. The initial revenue model for the service offered through the carriers will generally be a subscription-based model where users pay a monthly fee for access to the service and additional fees for premium content.
The company lacks any revenue to speak of—it only booked $36,000 in first nine months of 2009 and $0 in 2008. The company has only a history of losses, reporting an operating loss of $3.5 million and a net loss of $4 million the first nine months of 2009. The company says it expects to generate more net losses and negative cash flow ‘for the foreseeable future’.
Future income will depend greatly on Vringo’s capability of signing up more carriers, handset makers and mobile services providers, historically deals that take a lot of time and resources to get sealed and implemented.
Vringo was founded in January 2006 and is based in New York. We’ve tracked about $17.3 million worth of investments in the company in CrunchBase.
Vringo’s chief executive is Jonathan Medved, one of Israel’s leading serial entrepreneurs and venture capitalists. Medved founded Israel Seed Partners in 1995 in his garage and co-managed the fund until January 2006.
Israel Seed has $262M under management in four funds and has been an investor in some 60 Israeli companies. Exits include: Shopping.com (acquired by Ebay), Compugen (Nasdaq: CGEN), Answers.com (Nasdaq: ANSW) and Business Layers (acquired by CA).
You can watch a MarketWatch interview with Medved here.
(Via Wall Street Journal)