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Roku Just Doubled Its IPO Forecast to $252 Million

Roku, the independent company successfully fending off Apple, Amazon, and Google in the streaming TV device category, hopes to raise more than $252 million in its initial public offering, according to documents filed Monday with the U.S. Securities and Exchange Commission.

That’s more than double the $100 million the company originally forecast for the IPO.

Roku says in an amendment to its S-1 filing with the SEC that it will offer about 18 million shares at $14 apiece. The total maximum raise for the IPO is $252.2 million, a figure that would be reached if underwriters purchase the total amount of 2.3 million shares available to them.

The Los Gatos, Calif. company says it anticipates shares to be priced between $12 and $14. Roku has benefited from a growing number of cord-cutting cable subscribers ditching pay television in lieu of “over-the-top” streaming services like Netflix and Hulu.

The SEC filings offer new insight into the streaming television set-top maker. Roku makes the bulk of its money selling its Internet set-top box, rather than the services within. But over time it has been able to diversify its business and now generates revenue from advertising and subscriptions, too.

One growth area of note has been in “ad-supported” content; that’s another way of saying that people are willing to watch shows with ads if the content is free. Hours streamed on the Roku platform that included advertising grew to 2.9 billion hours in the first six months of 2017, up 76% year-over-year from the six months ended June 30, 2016. Searching for free content was the top reason users visited Roku’s website last year, other than to manage their Roku accounts, the company said in the IPO.

Roku is still not profitable, though its active accounts grew to 15.1 million as of June 30, 2017. That momentum is helping it push ahead of rival products such as Google Chromecast and Apple TV. The company’s streaming devices are being used a lot: Roku users streamed more than 6.7 billion hours on the company’s platform in the first six months of 2017, a 62% increase from the same period last year.

Roku is backed by Rupert Murdoch’s 21st Century Fox, Menlo Ventures, Globescan Capital Partners, and Fidelity. Menlo Ventures is the company’s largest shareholder with a 35.3% stake. Fidelity has a 12.9% stake, followed by Twenty-First Century Fox at 7%, and Globespan Capital Partners at 6.1.%.

Following the offering, Roku founder and CEO Anthony Wood will hold a 27.3% stake in the stock but will control approximately 32.1% of the voting power.