Roll ’Em Up! Video Back-End Company KIT Digital Buys KickApps, Kyte, Kewego
One buyer, three exits: KIT Digital, which helps big companies manage Web video delivery, has picked up three start-ups in the last week. KIT paid a total of $77.2 million for KickApps, a New York-based social media app maker, Kyte, a San Francisco-based mobile video company and Paris-based Kewego, which helps push video to multiple kinds of screens.
KickApps CEO Alex Blum will become KIT’s COO, and Blum and KIT CEO Kaleil Isaza Tuzman say almost all of the three acquired companies’ employees will hang on to their jobs.
Tuzman said his company paid about $62 million in KIT’s Nasdaq-traded stock for the three companies, and the balance in cash.
KickApps and Kyte had collectively raised some $55 million, so the companies’ backers aren’t going to do much more than break even in these deals. And the deal may be a coulda-shoulda for KickApps, which had talked to AOL about a $90 million deal three years ago, but never got it done.
Blum wouldn’t comment directly about the AOL non-deal, except to note that the spring of 2008 “was a different era.” And he says that all of his investors, which include North Atlantic Capital, Spark Capital and Softbank, have gotten “more than their money back,” and that all of them have taken KIT stock instead of cash. Spark general partner Santo Politi will join KIT’s board.
Tuzman, meanwhile, has an interesting story. During the first bubble he ran GovWorks, a failed start-up that happened to have a movie crew documenting its rise and fall. (Sadly, you can’t get “Startup.com” from Netflix or any other obvious place–can anyone point us to a copy?)
But this Forbes profile documents his efforts to build a second career. And at the very least, his newest company appears to be growing. In its last public filing, KIT reported quarterly losses of $8 million on sales of $28 million, which was up 151 percent from the previous year.
And late last year, KIT raised more than $100 million earmarked for acquisitions. None of that money, Tuzman says, was spent on these three deals.