Video-sharing company Longboat Key raises $400 million from merger | Business Observer
Rumble is on a roll.
The latest news from global video-sharing platform company Longboat Key, which caters to a conservative audience, is a lucrative Wall Street deal that values the company at more than $2 billion.
The deal, a merger with a special purpose acquisition company, also known as SPAC or a blank check company, has several key elements. A big deal, according to a statement and public filings, is the merger, which closed Sept. 16, provides Rumble with some $400 million in gross proceeds. This includes approximately $85 million from a funding agreement; $15 million from a forward purchase investment; and approximately $300 million in cash held in a trust account.
The SPAC entity created for the purpose of buying and publicizing Rumble is CF Acquisition Corp. VI. Prominent Wall Street executive Howard Lutnick, chairman and CEO of Cantor Fitzgerald, oversees CF Acquisition Corp. VI. Other investors in the company from before the SPAC merger include billionaire investor Peter Thiel, an early Facebook investor who supported several national conservative causes and political candidates.
Net proceeds from the deal will be used to attract new content creators to the Rumble and Locals platforms, the statement said. It will also be used to “continue to grow Rumble’s independent infrastructure, expand Rumble’s teams, begin strong commercialization of the platform” and pay for future acquisitions. Rumble posted $11.17 million in revenue over the past 12 months with gross profit of $1.96 million, according to public filings. Revenue is up 232% since 2019.
“Today marks an incredible milestone for our company, and one I’ve been looking forward to for a long time,” Rumble Founder and CEO Chris Pavlovski said in the Sept. 16 statement. “This transaction allows Rumble to fund a wide range of business initiatives, including growing our independent infrastructure while continuing to add top creators to our platforms. I am extremely pleased to report that despite current market conditions , we kept nearly all of the cash in trust, with almost no redemption from CFVI shareholders.
Founded in Toronto in 2013, Rumble moved its headquarters to Sarasota County in November 2021. At the time of the move – Sarasota County Commissioners considered granting performance-based employment incentives to Rumble, but no funds were ever approved – the company said it planned to hire 20-25 people immediately. Company officials also said they plan to invest at least $50 million to grow its local presence over the next few years. The company’s office, according to public records, is at 444 Gulf of Mexico Drive.
“Moving to Longboat Key is a win-win situation for Rumble and the Sarasota community,” Pavlovski said in a statement about the move. “Sarasota County is growing rapidly and we are excited to be a part of that growth.”
Rumble officials declined multiple attempts to interview Pavlovsky about the headquarters move or the company’s strategy. A company spokesperson did not return texts or emails seeking comment on the recent SPAC merger.
Some details about the merger, the company’s growth plans and what officials consider its competitive advantage, were available in public documents. For one thing, the company says the deal gives it a “pro forma enterprise value” of $2.2 billion.
A key part of Rumble’s strategy, officials said in an investor prospectus, is to add “content verticals,” with everything from arts and pets to games and cryptocurrency. It also aims to “identify the best creators and provide them with better distribution” than other platforms, the prospectus says. Current major content providers and creators range from actor and comedian Russell Brand and journalist Glenn Greenwald to MMA fighter Jorge Masvidal and author and radio host Dr. Drew. As an example of what Rumble says it can provide top creators, he cites conservative commentator and podcaster Dan Bongino. The company says its platform and reach have led Bongino to generate 1.9 million Rumble subscriptions, double its 864,000 on YouTube.
Another aspect of the company’s strategy is to drive more engagement with three platforms: web browser, mobile app and connected TV. As part of this, it lists several new and upcoming features, including live streaming, camera integration, and tipping. Other segments of the strategy include building an internal ad network and capitalizing on the growing market for managing cloud services and web hosting for other platforms.
While company officials aim for Rumble to be content-neutral, the prospectus highlights the niche of conservative-leaning content. With the issues that some of the social media giants are facing, including potential federal and state content regulation and legislation, this niche is also a big opportunity. “We’ve only scratched the surface,” the prospectus says, “of what this business could be.”