The latest news for the Longboat Key global video-sharing platform company, which caters to a conservative audience, is a lucrative Wall Street deal that values the business at more than $2 billion.
The deal, a merger with a special purpose acquisition company, also known as a SPAC or a blank check company, has several key components. A big one, according to a statement and public filings, is the merger, which closed Sept. 16, provides Rumble with some $400 million in gross proceeds. That includes about $85 million of proceeds from a financing agreement; $15 million from a Forward Purchase Investment; and approximately $300 million of cash held in a trust account.
The SPAC entity created for the purpose of buying and taking Rumble public is CF Acquisition Corp. VI. Prominent Wall Street executive Howard Lutnick, chairman and CEO of Cantor Fitzgerald, oversees CF Acquisition Corp. VI. Other investors in the company, predating the SPAC merger, include billionaire investor Peter Thiel, an early Facebook investor who has backed multiple national conservative political causes and candidates.
Net proceeds from the deal will be used to attract new content creators to the Rumble and Locals platforms, the release states. It will also be used to “continue to build out Rumble's independent infrastructure, expand Rumble's teams, begin robust marketing of the platform” and pay for future acquisitions. Rumble has posted $11.17 million in revenue in the past 12 months with a gross profit of $1.96 million, public filings show. Revenue is up 232% since 2019.
"Today marks an amazing milestone for our company, and one that I have been looking forward to for a long time," Rumble founder and CEO Chris Pavlovski says in the Sept. 16 statement. "This transaction allows Rumble to fund a wide range of business initiatives, including the development of our independent infrastructure while we continue to add top creators to our platforms. I am extremely excited to report that despite current market conditions, we have retained nearly all the cash in trust, with nearly zero redemptions from CFVI shareholders.”
Founded in Toronto in 2013, Rumble moved its corporate headquarters to Sarasota County in November 2021. At the time of the move — Sarasota County commissioners considered granting performance-based job incentives to Rumble, but no funds were ever approved — the company said it planned to immediately hire 20-25 people. Company officials also said they intended to invest at least $50 million in growing its local presence in the next few years. The company’s office, public documents show, is at 444 Gulf of Mexico Drive.
“Moving to Longboat Key is a win-win for Rumble and the Sarasota community," Pavlovski said in a statement about the move. "Sarasota County is growing rapidly, and we are excited to be part of the growth.”
Rumble officials have declined several attempts to interview Pavlovski about either the headquarters relocation or company strategy. A company spokesman didn’t return texts or emails seeking comment about the recent SPAC merger.
Some details about the merger, and the company’s growth plans and what officials say is its competitive advantage, were available in public filings. For one, the company says the deal gives it a “pro forma enterprise value” of $2.2 billion.
A key part of Rumble’s strategy, officials say in an investor prospectus, is to add “content verticals,” with everything from arts and pets to gaming and cryptocurrency. It also seeks to “identify top creators and provide them better distribution,” than other platforms, the prospectus states. Current prominent content providers and creators range from actor and comedian Russell Brand and journalist Glenn Greenwald to MMA fighter Jorge Masvidal and author and radio host Dr. Drew. By way of example of what Rumble says it can provide for top creators, it cites conservative commentator and podcaster Dan Bongino. The company says its platform and reach led Bongino to generate 1.9 million Rumble subscriptions — double his 864,000 on YouTube.
Another aspect of the company’s strategy is to drive more engagement with three platforms: web browser, mobile app and connected TV. Within that, it lists several new and upcoming features, including live streaming, camera integration and gifting-tipping. Other segments of the strategy are to build an in-house ad network and capitalize on the growing market of handling cloud and web-hosting services for other platforms.
While company officials aim for Rumble to be content-neutral, the prospectus highlights the niche in conservative-leaning content. With the issues some of the social media giants are facing, including potential federal and state content regulation and legislation, that niche is also a big opportunity. “We have only scratched the surface,” the prospectus states, “of what this business could be.”
This article originally appeared on siste site BusinessObserverFL.com.
Mark Gordon is the managing editor of the Business Observer. He has worked for the Business Observer since 2005. He previously worked for newspapers and magazines in upstate New York, suburban Philadelphia and Jacksonville.