Australian-founded live video network Kondoot has unveiled an ambitious plan to raise $10 million through an initial public offering, after raising $3.2 million in a funding round led by US investors.
Kondoot, founded by Brisbane-based university friends Mark Cracknell, 21, and Nathan Hoad, 25, is a social network based on live broadcast.
It launched in the US in December last year, following a soft launch in Australia.
Kondoot initially raised $800,000 primarily from Australian investors, using the Australian Small Scale Offerings Board as a funding platform. It then closed a $3.2 million funding round in the US.
It now intends to become a listed company, lodging a prospectus with the Australian Securities and Investments Commission for the initial public offering of its shares to raise $10 million.
For its raising, Kondoot is offering 83,333,334 new shares at 12 cents each. Applications must be for a minimum of 16,667 shares or $2000.
Described as a combination of Facebook, Skype and YouTube, Kondoot enables users to publish live and recorded broadcasts, and enjoy video chat and instant messaging.
It also offers the possibility of charging for access to a video stream, allowing record companies to sell tickets for a gig, or public speakers to sell tickets to their presentations online.
While infinitely smaller than Facebook, Kondoot’s founders are talking up their potential to break out on the global stage.
“Kondoot has the potential to be the most successful social media website in the world… [There will be] many opportunities our company has to offer with new investors,” Cracknell says.
“Kondoot has developed a unique concept that we believe has the potential to change the way the world communicates, opening up huge opportunities in areas of promotion [and] education.”
Kondoot has established itself as a global network, with subscribers in more than 135 countries.
Although its initial focus will be on the US and Australian markets, the start-up insists it is “already off to a flying start” in South East Asia, and intends to boost its European presence.
Cracknell told The Australian Financial Review he doesn’t expect to see Facebook introducing a replica service to Kondoot any time soon.
“They couldn’t just click their fingers and do it. That is why we have a good technology team working on keeping ourselves ahead,” he said.
According to Cracknell, the decision to open up its register and enable sale of stock through registry services means more small retail investors can buy into the company.
Kondoot is not yet profitable, but Cracknell claimed it has a clear business model on paid broadcasting, where users can charge a fee to viewers, with Kondoot taking 20% of the ticket price.
Cracknell said the possibility of making money through advertising has been investigated, but the site is looking to build traffic first. Kondoot is open to the idea of being acquired, but on its terms.
“Even if Google offered us $10 billion, we would still have to sit back and work out if it was the right thing to do,” he said.
The news comes after an announcement by US-based start-up Yammer, an enterprise social network and communications platform, which has raised $85 million in a new round of funding.
Investors include DFJ Growth, Social+Capital Partnership, Meritech, Khosla Ventures, Capricorn, Charles River Ventures, Founders Fund, USVP and Emergence Capital Partners.
The new funding takes total investment in Yammer to an impressive $142 million.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
