Online video marketing platform Rightster raises £20m in AIM IPO

Digital video marketing firm Rightster, founded by serial tech entrepreneur Charlie Muirhead, has raised £20.4m through a listing today on the Alternative Investment Market (AIM), the junior counterpart to the London Stock Exchange.

Founded in May 2011, Rightster was launched as a business-to-business video network, aiming to help content owners and marketers manage rights to video content online.

It operates a Software-as-a-Service (SaaS) platform which it says is the only unified solution where customers can manage uploads, distribution, geographic rights and monetisation through a single service.

The London-based firm initially targeted the fashion industry, with its first customer being the British Fashion Council, and has subsequently expanded its operation to include news, sports, entertainment and viral videos.

The company’s client list has grown to amass more than 750 content owners and 6,500 publishers across the globe, and financials released in Rightster’s share document revealed it had turned over £4.8m by June 2013.

Rightster also provides a live streaming service, with notable events covered by the firm including the Royal Wedding and the Leveson inquiry.

The firm says it now generates around 160.7 million views a month through its clients’ content, representing growth of 613% since 2012.

In its two and a half years of trading Rightster has also made several significant acquisitions, most notably purchasing European film trailer distributor Preview Networks for €2.1m this year to boost its position as one of Youtube’s leading multi-channel networks.

Rightster also owns 25% of viral rights management company VML and partially owns UK display advertising sales company Sports Syndicator.

The fast-growing company was named this month as one of Silicon Valley Comes to the UK’s 63 British tech companies with revenue potential in excess of £100m.

Founder Charlie Muirhead is a serial tech entrepreneur, having founded various web companies before Rightster including data management and communications companies Orchestream and Netagent and online television network t5m.

The £20.4m IPO will see Rightster offer 34 million shares at 60p a share and would represent the culmination of another successful start-up stage for Muirhead, who grew Orchestream into a £1bn company and raised £10.3m for Nexagent’s first round of funding in 2000.

Rightster expects to use the money raised from the flotation to provide a substantial amount of working capital in order to develop, market and launch its ‘second generation’ rights management platform in the fourth quarter of 2013.

According to its share document, Rightster will use around £1.9m of the proceeds to pay off a number of loans and obligations accrued by the company.

Righster says it is also exploring options for additional acquisitions following the flotation, in order to increase its share of the £9bn online video market.

Early signs show the flotation may raise more capital than predicted by Rightster, with the share price already having risen by 7% to 75p a share this morning.