Roku’s IPO values the company at $2 billion

Roku completed a public offering this morning, raising $252 million in an IPO that valued the company at $2 billion. It will trade on the NASDAQ exchange under the ticker symbol ROKU. The company makes streaming sticks that allow you to watch streaming video on your television. It also makes software that is baked right into new TV sets from a range of well-known manufacturers. Investors sent shares surging on the first day, betting the company can fend off larger rivals.

The cash Roku raised today will be used to compete against a host of tech giants. Apple, Amazon, and Google are all selling streaming hardware, and both Amazon and Google have partnered with TV makers to get their software operating systems on brand-new sets. Roku claims to have just over 15 million active accounts, which made just under $400 million in revenue in 2016. But it also burned more cash than the year before, reporting a net loss of $42.6 million for the year.

Roku’s advantage is that it doesn’t make any of its own content. In its S-1 filing to the SEC, the company told investors that its mission is to be the “streaming platform that connects the entire TV ecosystem.” We have seen battles between the big tech companies limit consumer choice before; for years you couldn’t stream Amazon Prime on Apple TV, for example, and just this week YouTube was suddenly pulled of Amazon’s Echo Show. Roku’s offering, on the other hand, plays nice with whatever service you want to watch.

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