Roku, the over-the-top (OTT) streaming player service, plans to launch an IPO before the end of the year, The Wall Street Journal reports. Sources familiar with the matter say the company has recently hired hired Morgan Stanley, Citigroup and Allen & Co. as underwriters and could privately file in the next few weeks. The company reportedly expects a valuation of $1 billion
Why it matters: Roku flirted with an IPO as a hardware company in 2014 but waited until they built out their streaming services to diversify their revenue stream. So far, it seems that they've done pretty well:
- 2016 was a record growth year for Roku, ending the year with 13 million accounts. By years' end, 1 out of every 8 U.S. smart TV's (now over 50% of the U.S. TV market) runs Roku OS.
- The company expects a 50% increase in models this year, with 150 models available to consumers in North America.
- Roku currently leads the streaming box and stick device OTT category over Amazon, Google and Apple in device penetration, according to comScore.