Sources close to YuMe Inc. said the company pegged the selling price of 5.1 million shares available in its initial public offering at US$9 per unit. The price sets the total IPO valuation to US$46.1 million. YuMe Inc. previously expected to sell the five million shares for somewhere between US$12 and US$14 per YuMe share. The below expected offer price of the shares, according to analysts, is a clear sign as to the continued skepticism that the market and investors have on digital marketing firms.
YuMe is a software developer that provides television-style advertisements on Internet videos. The firm directly competes with large industry players such as Google Inc. and a number of smaller technology companies as well. YuMe, however, recorded a revenue of US$26.6 million in the second quarter. The numbers is equivalent to a 33% increase from previous year's revenues. YuMe also recorded a number of profitable quarters in the past two years.
The company previously said they planned to make use of the proceeds to fund its operations. The plan includes potential acquisitions or other investments within its technology. YuMe Inc.'s existing venture capital investors such as Accel Partners and Khosla Ventures did not put any of their shares up for sale in the market debut.
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