Mux
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Developer-focused video platform Mux achieves unicorn status with $105M funding
Barely more than eight months after announcing a $37 million funding round, Mux has another $105 million.
The Series D was led by Coatue and values the company at more than $1 billion (Mux isn’t disclosing the specific valuation). Existing investors Accel, Andreessen Horowitz and Cobalt also participated, as did new investor Dragoneer.
Co-founder and CEO Jon Dahl told me that Mux didn’t need to raise more funding. But after last year’s Series C, the company’s leadership kept in touch with Coatue and other investors who’d expressed interest, and they ultimately decided that more money could help fuel faster growth during “this inflection moment in video.”
Building on the thesis popularized by a16z co-founder Marc Andreessen, Dahl said, “I think video’s eating software, the same way software was eating the world 10 years ago.” In other words, where video was once something we watched at our desks and on our sofas, it’s now everywhere, whether we’re scrolling through our social media feeds or exercising on our Pelotons.
“We’re at the early days of a five- or 10-year major transition, where video is moving into being a first-class part of every software project,” he said.
Dahl argued that Mux is well-suited for this transition because it’s “a video platform for developers,” with an API-centric approach that results in faster publishing and reliable streaming for viewers. Its first product was a monitoring and analytics tool called Mux Data, followed by its streaming video product Mux Video.
“If you’re going to build a video platform and do it data-first, you need heavy data and monitoring and analytics,” Dahl explained. “We built the data layer [and then] we built the streaming platform.”
Customers include Robinhood, PBS, ViacomCBS, Equinox Media and VSCO — Dahl said that while Mux works with digital media companies, “our core market is software.” He suggested that back when the company was founded in 2015, video was largely seen as a “niche,” or “something you needed if you were ESPN or Netflix.” But the last few years have illustrated that “video is a fundamental part of how we communicate” and that “every software company should have video as a core part of its products.”
Mux founders Adam Brown, Steven Heffernan, Matt McClure and Jon Dahl. Image Credits: Mux
Not surprisingly, demand increased dramatically during the pandemic. During the past year, on-demand streaming via the Mux platform grew by 300%, while live video streaming grew 3,700% and revenue quadrupled.
“Which is a lot of work,” Dahl said with a laugh. “We definitely spent a lot of the last year ramping and scaling and investing in the platform.”
This new funding will allow Mux (which has now raised a total of $175 million) to continue that investment. Dahl said he plans to grow the team from 80 to 200 employees and to explore potential acquisitions.
“We were impressed by Mux’s laser focus on the developer community, and saw impressive customer retention and expansion indicative of the strong value their solutions provide,” said Coatue General Partner David Schneider in a statement. “This funding will enable Mux to continue to build on their customer-centric platform and we are proud to partner with Mux as it leads the way to this hybrid future.”
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Mux raises $37M Series C as its API-based video streaming service scales
This morning, Mux, a startup that provides API-based video streaming tooling and analytics, announced that it has closed a $37 million Series C round of capital.
Andreessen Horowitz led the round, which included participation from Accel and Cobalt. Prior to this funding round, Mux most recently raised a roughly $20 million round in mid-2019. In total, the company had raised a hair under $32 million before its Series C, according to PitchBook data.
The Mux round lands amidst a number of trends that we’re tracking here at TechCrunch, namely API-based startups, which are hot as a group at the moment, and startups that are serving an accelerating digital transformation.
Let’s explore a bit of Mux’s history, and then dig into how the startup’s current pace of revenue growth explains its fresh infusion of capital.
From exits to analytics to APIs
TechCrunch spoke with Mux’s founder Jon Dahl about the round, curious about how the company came to be. Dahl was a co-founder of Zencoder back in the early 2010s, which sold to Brightcove. When Zencoder launched, TechCrunch said that it wanted “to be the Amazon Web Services of video encoding.” It wound up selling for $30 million, a figure that stood a bit taller in 2012, when the transaction was announced.
Dahl stuck around Brightcove for a few years while angel investing. Then in late 2015 he founded Mux. The new startup first built an analytics tool called Mux Data. Dahl said the analytics product was needed because more conventional tooling like Google Analytics don’t work well with online video.
Mux Data is a SaaS product. But what made Mux even more interesting is its on-demand infra play, namely Mux Video.
Mux Video is delivered via an API, supporting both live and on-demand video for other companies. The startup likes to argue that it’s doing for video what Stripe has done for payments, namely take a bundle of complexity and headache, wrestle it into shape, then offer it via a developer-friendly hook.
Delivering video, we’ve seen via the bootstrapped growth of Cloudinary and recent Daily.co round, is growing work in 2020.
That fact shows up in Mux’s numbers, which are somewhat bonkers. The company’s aggregate revenue numbers are growing at a pace that Dahl described as 4x, while Mux Video’s revenues are growing at a pace of 8x, he said. Dahl shared a few other metrics — startups: if you want folks to care about your funding round, follow this example — including that Mux Video’s LTV/CAC ratio is somewhere around 5x-6x, and that its net retention is around 160%.
The collected performance data that Mux shared explain why a16z wanted to put its capital into the company.
But to better understand that all the same, I caught up with Kristina Shen, a general partner at the venture firm. Shen stressed that Mux was heading in the right direction before the pandemic, but that COVID has accelerated the importance of video in how humans interact with one another — an accelerating secular shift for Mux to surf, in other words.
COVID has bolstered Mux, with a release regarding its new investment, noting that its “social media customers [have seen] an increase of 118% in video streaming since mid-February while fitness and health streaming surged by 162%, e-learning grew by 230% and religious streams jumped nearly 3 orders of magnitude.”
Shen said during our call that Mux is one of the fastest-growing enterprise SaaS companies that her firm has seen.
Finally, when asked about Mux’s gross margins, Shen said the company would eventually look similarly to other companies in the infra space, like Twilio and Stripe. This matches what Dahl told this publication, though the founder included a fun wrinkle. Remember Mux Data, the analytics product? Its margins more closely resembles SaaS economics, while Mux Video is more similar to other API, infra plays. So Mux has a bit of SaaS and a bit of infra in it, which should give it a super interesting blended gross margin profile.
Fun. The next time we talk to the firm we’ll be curious to see how far into the double-digit millions it can stretch its run rate.
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The top 8 startups from Y Combinator Winter ’16 Demo Day 2
Supersonic planes, food harvesting robots and instant HIV diagnosis were some of the ideas that wowed us on Demo Day 2 for Y Combinator’s Winter 2016 batch. We queried investors and TechCrunch’s writers to come up with our top 8 picks from all 59 startups that presented. Check out our coverage of the 60 YC startups from Tuesday, plus our 7 favorites. Additional reporting by Megan… Read More
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