TubeMogul counting on hot video ad market as it sets sights on July IPO

Is the online video ad market hot enough to support TubeMogul’s initial public offering at $11 to $13 a share, especially as the demand for programmatic ad buying remains a tad unsettled?

The Emeryville, Calif.-based company, which first filed its Form S-1 in March with hopes of raising $75 million, apparently believes it is, this week amending its SEC filing, setting the $11-$13 price with a potential target of more than $81 million if it sold all 6.25 million shares at $13. With an additional 22.44 million shares outstanding, a launch price would put TubeMogul (which will trade on NASDAQ as TUBE) market cap near $373 million.

TubeMogul’s basing its IPO on the bet that the worldwide digital video advertising market will continue growing at, or at least near, the 28% CAGR Magna Global estimates through 2017, which would bring the market from $8.3 billion last year to $22.5 billion in 2017.

It’s also counting on brands turning to programmatic buying to help ease the complexity of buying across an array of ad technologies.

The company’s shown solid revenue growth, from $15.7 million in 2011 to $34.2 million in 2012 to $57.2 million in 2013. In the first 3 months of 2014, it rang up sales of $22 million, a Y/Y increase of 130%.

Not surprisingly, the company’s yet to turn a profit, with losses of $4.1 million, $3.6 million and $7.4 million since 2011. It made some inroads in Q1 2014, with a loss of $767,000, down from $1.9 million a year ago.

TubeMogul also has steadily built its client base, from 25 in 2011, to 242 at the end of Q1 2014.

TubeMogul was founded in 2006. Underwriters include BofA Merrill Lynch, Citigroup, RBC Capital Markets, BMO Capital Markets, and Oppenheimer & Co. It is expected to price the week of July 14.

Back in March, I questioned whether TubeMogul — following relatively weak IPOs by Tremor and YuMe last year (both stocks have cratered) — would be able to excite enough attention on Wall Street to make its IPO an “event,” or simply another tech company that makes some noise on the day of its IPO and then quietly retreats into single-digit trading? That remains unanswered.

Stay tuned.

Jim O’Neill is Editor of Videomind and Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn