IAC is contemplating demerging Vimeo after reaching a valuation of $ 2.75 billion


Anjali Sud, CEO of Vimeo

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Iime-owned Vimeo has raised $ 150 million in equity from Thrive Capital and GIC and valued the video company at $ 2.75 billion, IAC said Thursday.

IAC is also considering a spin-off of its stake in Vimeo, where demand has increased due to the Covid-19 pandemic. A decision is still in the early stages and it is unclear what the terms of the spin-off would be, said IAC CEO Joey Levin in a letter to shareholders on Thursday.

"Given the success of Vimeo and widespread investor recognition for the 'Software as a Service' category, we expect Vimeo to access capital within IAC will be much more expensive than access to capital outside of IAC, and that capital will be helpful in enabling Vimeo to achieve its highest ambitions, "Levin said.

If the companies split up, Vimeo would be the 11th publicly traded company to spin off from the IAC. The company recently agreed to outsource all of its shares in online dating company Match Group.

"We have always said that we are the anti-conglomerate and we optimize for anything that enables our companies to achieve their best chance of operational success," said Levin.

IAC reported in its earnings for the third quarter on Thursday that Vimeo increased total revenue 44% year over year to $ 75.1 million, while its subscribers grew 21% to $ 1.46 million. The company's operating loss decreased from $ 11.2 million to $ 3.3 million, while Adjusted EBITDA increased to $ 3.4 million, compared to a loss of $ 8 million in the third quarter of 2019.

Correction: The heading of this story has been updated with the correct rating for Vimeo.

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Katherine Clark