Vidyard has raised another US$35 million in investment to accelerate sales of its video marketing platform and double its workforce to 200 in the coming year.
The Series C financing, led by Boston-based Battery Ventures, closed on Dec. 18 and flowed to the Waterloo Region company early this month as the Canadian dollar plunged, making the round worth roughly $50 million in Canadian currency, Vidyard CEO Michael Litt said. The company's valuation now sits at about US$350 million, the Wall Street Journal reported.
The news comes just a year after the company raised US$18 million in a Series B round led by Bessemer Venture Partners, the Silicon Valley firm that has backed LinkedIn, Shopify and Pinterest, among others. Bessemer, along with Salesforce Ventures, OMERS Ventures, iNovia Capital and SoftTech VC, also participated in this latest round.
“Our growth from 2014 to 2015 was just over 3x, and that’s the third consecutive year we had done that,” Litt said in an interview. “It gets harder to maintain [that rate of growth] every year, but the growth is a leading indicator that there’s a massive public market out there, willing to support us.”
The fresh capital infusion at Vidyard comes as video continues to gain momentum as a marketing tool. Cisco expects video to account for 80 per cent of all Internet traffic by 2019, up from 64 per cent today. Also, between April and September last year, the number of videos played daily on Facebook doubled, from four billion to eight billion. Businesses that sell to other businesses are jumping on these trends, with 95 per cent of them planning to spend more on video this year.
Vidyard, whose software enables businesses to analyze the performance of their marketing videos in real time, “is clearly innovating in this space,” said Michael Brown, general partner at Battery Ventures. “We’re convinced that video will not only grow as a strategic platform for marketing and sales, but also as a critical solution for other business functions across every industry,” he said.
Those other business functions include employee training, an area where Vidyard did not initially predict its customers would use its platform, Litt said.
“Our bread and butter is in video analytics. We call that digital body language – we track how people view content and report that to them,” Litt said, adding that “that’s very valuable for employee training and for sales enablement.”
If, for example, a company hires 1,000 salespeople, “their biggest challenge is getting those 1,000 sales reps up to speed as quickly as possible,” he said. “The best way to do that is with video, because it doesn’t require a trainer’s time. It can be quick hits.”
The company can analyze those sales reps’ performance against the time they spent watching the videos, Litt said, “so there’s huge value there in the ROI of training material.”
In other cases, companies are choosing to send demonstration videos to potential clients, to save time on doing live demos. Based on the analytics it collects, Vidyard can advise companies on the right demo videos to send, and recommend follow-up based on how customers interact with them.
All this data goes back into Vidyard’s system, constantly adding to what the company knows about how video is used, Litt said.
“The whole story is that video is this ubiquitous medium that can be used inside an organization, and we want to be the platform that can help every aspect of the organization to use it effectively,” he said. “That’s what Battery really liked about the future vision, and why they decided to invest in us versus the five or six competitors that they had talked to during the process.”
Vidyard's customer base now includes 24 of the global top 100 software companies, and such names as Honeywell, LinkedIn, Lenovo and Citibank.
Litt said Vidyard wasn’t looking to raise again for another 18 to 24 months after its Series B round, but that changed after a Battery associate visited their King Street office in Kitchener last spring. By Halloween, Brown, the Battery partner who would lead this latest round, had visited as well, and even helped Vidyard close a major deal with a customer while he was here.
Other venture firms had also shown interest in leading the C round, Litt said, but “we made the decision to ultimately go with Battery, predicated on the fact that they were a better partner for the business.” It didn’t hurt that Battery had backed ExactTarget, a marketing software firm that Salesforce acquired for US$2.5 billion in 2013.
Asked if the Series C round is a prelude to an initial public offering to take Vidyard public, Litt said, "IPOing is certainly a means to an end, and the right thing to do for all shareholders and stakeholders, but it might not be the best thing to do for Vidyard depending on where we’re at . . . But realistically speaking, if we’re able to sustain our growth rate as we have, then we’re within a two-and-a-half- to three-and-a-half-year window of filing an S-1 [to go public]. And that’ll happen pretty much overnight."
Vidyard’s continued growth will soon mean a move out of its funky, two-level loft-style space on King Street and into a standalone historic building nearby at 8 Queen St. N. The scheduled move-in date is May 1, but after months of renovations “yielded a few mysteries,” Litt said he won’t be surprised if that date is pushed ahead to sometime in June.
The new building, once part of the original Goudies department store, has room for about 250 “Vidyardians,” as company employees call themselves, a number that it could surpass sometime next year.
Vidyard, a graduate of California's Y Combinator accelerator program in the summer of 2011, has raised more than $60 million to date.
