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Company Profile: KIT digital

"Aggressive humility," is how Kaleil Isaza Tuzman describes the company of which he is Chairman and CEO. "Aggressive in our day-to-day, but humble about the things we don’t do well. That’s bred a disciplined approach that has also allowed us to quadruple our business over the last 2 years."

Headquartered in Prague, KIT digital has crept under the radar over the last couple of years to become a leading player with grand ambitions in the IP video management space.

Last year it posted revenues of $47 million, which represented a 99% increase over 2008. KIT digital expects revenues to increase by at least 60% to over $75m in 2010, with a 17.5% operating EBITDA. The company has 14 offices in 11 countries, with a full-time staff of 300 and operating cash flow of $1 million a month.

KIT claims a 12-15% leading market share but "since 15% is not a lead to really shout about" Isaza Tuzman, the firm’s majority shareholder, says he plans to grow that to 30-50% over the next 18-24 months. "We can achieve that by executing on organic growth targets and also with one or two complementary acquisitions," he says.

Technological Focus, Global Reach
Its software-as-a-service platform, "VX-one", is designed to manage video over IP and service multi-point, multi-device publishing. VX-one supports video ingestion, transcoding, storage, meta-tagging, advertising, reporting, and delivery. Its 600-strong client base includes The Associated Press, Disney-ABC, GM, Google, IMG Worldwide, Intel, News Corp, Telefonica, the U.S. Department of Defense, Verizon and Vodafone. That’s a heavyweight list of Fortune 500 companies which, with an exclusive focus on that elite group, has helped KIT grow during the recession.

"Our ambition is to be the leading provider of IP asset management solutions to the enterprise," confirms Isaza Tuzman. "Our technology is built for multinational corporations that operate on different computing platforms and different systems interfaces, while supporting operations spread across geographic areas, and in many different human languages. Whereas some of our competitors may have thousands of small and mid-sized clients on their books with average revenue per month in the hundreds of dollars, our ARPU is over $8,000."

"That’s because we’re not trying to be all things to all people. Our concentration is on large companies with highly complex video-management needs. For these clients, our VX platform supports ‘front-end’ entertainment-oriented video deployments for media companies, MSOs and telcos, as well as ‘back-end’ corporate video deployments—supporting corporate communications initiatives, security and surveillance, human resources training and more."

Isaza Tuzman was previously President and COO of Canadian IPTV carrier JumpTV, as well as chairman and a former CEO of digital media services company KPE, prior to which he was a Goldman Sachs banker. He joined KIT digital in January 2008, and with Gavin Campion (former CEO of Reality Group and Sputnik Agency) as president, helped steer the company to profitability.

When Isaza Tuzman and Campion took over KIT digital (then called ROO Group) at the beginning of 2008, it was doing less than $1 million in monthly revenues and burning $2.5 million per month. Their first moves included shutting down the company’s ad sales and peer-to-peer streaming desktop application initiatives, making 60% staff cutbacks, and concentrating squarely on video asset management enterprise software provision (delivered on an SaaS basis).

"Over the last two years, we have taken a disciplined approach and have grown on our own gasoline," says Isaza Tuzman. "Our growth since 2008 has been approximately 70% organic and 30% by acquisition. At first glance, it may look like there has been more acquisition activity than there actually has been because there were a couple of subsidiary minority interest buy-ins, and several extremely small deals (comprising less than 5% of our revenue in aggregate)."

Managed Growth
These small deals included May 2008’s purchase of Stockholm-based video publisher Kamera Content, September 08’s addition of Australian content management systems specialist Morpheum and April 09’s gain of UK-based IPTV solutions provider Narrowstep.

There have been three significant acquisitions. In October 2008 KIT digital paid $2.5m cash plus shares for Czech-based IPTV services provider Visual Connection, gaining a strong hold on the Central and Eastern European markets. Late last year, the company spent $20.9m in aggregate, adding Germany’s mobile TV solutions developer Nunet and New York B2B video asset management platform The Feedroom.

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