The round did not include follow-on investments from current investors, but the company said the Sachs round is a prelude to an IPO
Kaltura raises US$50 million from Goldman Sachs in Series F
Israeli video startup Kaltura announced a major US$50 million round on Monday morning with just one investor – Goldman Sachs. This fresh injection of cash brings the company’s total fundraising to US$160 million.
The company previously raised a similarly sized US$47 million round in February 2014 led by Common Fund, Sapphire Ventures, Gera Venture Capital and Nokia Growth Partners. There was some uncertainty on Kaltura’s valuation, with Haaretz not specifying and Hebrew-language economics daily Calcalist putting it at US$500 million.
“Goldman Sachs is the biggest underwriter in the world and they are painting up in the colors we need for an offering,” Kaltura CEO Ron Yekutiel told TheMarker. “They examined us from the viewpoint of ‘Can you be an attractive publicly traded company’ and decided they would invest in us.”
He emphasised the company was trying to avoid a buyout and wanted to go public, resulting in a fairly long vetting process by Goldman Sachs. If it goes through, this move would definitely buck the trend among startups to stay in private markets or to seek a big exit.
The company’s main operations are in Israel, where 250 of its 450 employees work. They claim about 1,000 organisations as clients. They had previously listed several big names among them: Warner Brothers, Ericsson, AstraZeneca, Groupon, Nestle, IKEA, Bank of America, HBO and ABC among others. They maintain corporate headquarters in New York with other offices in London, Singapore, São Paulo and San Francisco.
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Kaltura’s competitors are multiplying as others exit. Video analytics startup Ooyala was bought by the Australian Telstra in 2014, while now public Brightcove had raised over US$158 million before its IPO according toCrunchbase. Research group Gartner places Kaltura as one of the industry leaders for “enterprise video content management,” which is a mouth full, ranking them in the same league as Qumu and Panopto. Some of the other players in that arena include MediaPlatform, VBrick and Sonic Foundry.
The round is unusual in that none of the previous investors returned to take part in it. That could mean dissatisfaction among the existing investors to the terms of the round, possibly on the question of their valuation. Lisa Bennett, Kaltura’s VP of Marketing, waived off that speculation while saying that the officially undisclosed valuation was indeed higher this time around than the 2014 round.
“Goldman wanted to invest the full amount and the company didn’t need or want to raise additional funds. So the existing investors had to waive their participation (they did want to participate). None of the existing investors sold any of their shares. They remain strong supporters of the company, but stepped aside at Goldman’s request to let them put [in] the full amount.”
Bennett said they saw a much more intense vetting process for the Sachs round than with typical venture rounds startups might have, including their own past raises.
“The process was significantly longer, and the degree of scrutiny and diligence much higher. We were dissected from all perspectives as if it were an IPO, which was exactly our intention. The process helped validate our readiness, and helped us identify areas of focus as we near the point of being a public company, and are already behaving as one.”
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The article Goldman Sachs brings the muscle with $50 million investment in Israel’s Kaltura first appeared on Geektime.
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