Elemental Technologies Says Revenue Increased by 50 Percent in 2013

Posted by Joe Zaller
Jan 15 2014

Video transcoding and compression specialist Elemental Technologies had another year of significant growth in 2013 after more than doubling in 2012.

In previously published reports, privately held Elemental disclosed that its revenue in 2012 was $21m, up 100 percent versus 2011.   Now a newspaper in the company’s home town, is reporting that Elemental grew its revenue by more than 50% in 2013 versus 2012. This implies that the company’s 2013 revenue is somewhere in the region of $31.5m, or about three times what it was just two years ago.

Much of the company’s growth likely comes from international markets given that the company now has five offices in Asia alone.

Interestingly, much that has been written about Elemental recently focuses on compression rather than transcoding – particularly in regard to HEVC compression of 4K images.  According to the article, Elemental did a joint demo with Qualcomm at the recent CES exhibition where they demonstrated streaming 4K video to a tablet at 10Mbit/s using HEVC compression, although it’s not clear whether this was done in real-time (although I attended CES, I did not see the demo).

It’s interesting to see that Elemental is pushing both encoding and transcoding these days, because expands their market into new areas.

It also potentially puts them into competition with large number of companies from Ateme to Zencoder, and everyone in between including industry giants such as Cisco, Ericsson, and Harmonic. But when the market shifts to a new technology standard, as it will eventually do with HEVC compression (and maybe 4K delivery), there are opportunities for new players to break into the market and gain market share.

The fact that the company is working with Qualcomm indicates that Elemental’s HEVC technology is partially targeted, at least initially, at mobile devices rather than broadcast transmission.  This makes sense as our previous research has shown that HEVC will likely be adopted first in streaming and mobile applications where downloadable codecs are more readily available than in markets such as cable and satellite.

Elemental is privately held. In May 2012, the company closed a $13m fundraising round led by Norwest Venture Partners, which brought the total amount of funding raised by Elemental to just under $30m.  In 2010, the company closed a $7.5 funding round, led by General Catalyst, Voyager Capital and Steamboat Ventures, who also participated in the May 2012 fundraising round.

In addition to generating a lot of interest in the company, Elemental’s aggressive push  into 4K and HEVC has also likely created an opportunity for the company to enter new areas of the market during this time of technology transition.

For Elemental’s core business of transcoding, the fact that broadcasters and media companies are working to deploy multi-screen services, video transcoding has become a hot space, and Elemental’s impressive year-over-year growth is certainly a testament to this phenomenon.

 

As a result of the growth in this technology area, transcoding has also attracted its fair share of financing and M&A activity.  Here’s a quick run-down of some of the recent transcoding-related news and deals:

 

 

 

 

  • In January 2013, Amazon unveiled its “Amazon Elastic Transcoder.” Based on the company’s Amazon Web Services (AWS) cloud computing platform, the Elastic Transcoder the service provides “a highly scalable, easy to use and a cost effective way for developers and businesses to transcode video files from their source format into versions that will playback on devices like smartphones, tablets and PCs.”

 

  • In August 2012 Brightcove bought Zencoder, a 2-year old start-up with $2m in revenue for $30m, and subsequently launched a cloud based transcoding service at IBC 2012

 

 

 

 

 

 

 

 

 

  • RGB Networks bought transcoding vendor Ripcode in 2010

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.Related Content:

The Oregonian – Elemental Technologies sees a vivid future in ultra high definition TV

Elemental Technologies Says Revenue Doubled in 2012 to $21 Million as Transcoding Technology Continues to Grow

Harmonic Moves Transcoding Technology to the Cloud, Launches AWS-Based Service

Amazon Launches Scalable Cloud-Based “Elastic Transcoder” Service – A Potential Disruptor in a “Hot” Technology Space

More Broadcast Vendor M&A: Brightcove Buys Zencoder for $30 Million in Latest Video Transcoding Deal

More Broadcast vendor M&A: Wohler Buys RadiantGrid, Latest in Series of Transcoding Deals

Envivio Files for $85 Million Goldman Sachs Led IPO

Envivio Closes $16.5 Million Fundraising Round

More Broadcast Vendor M&A: Private Equity Firm Acquires Telestream

More Broadcast Vendor M&A — Telestream Purchase of Anystream Now Official

More Broadcast Vendor M&A: Cisco to Buy Inlet Technologies for $95m

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