Last month, Elemental Technologies put out a press release highlighting the fact that their revenue growth exceeded 200% year-over-year. Many vendors put out these kinds of releases at the end of the year and since most of them are private, the percentages quoted don’t really mean much since we don’t know what base numbers they are working off of. But in the case of Elemental, we know the numbers and they are impressive.
Based on a Inc. Magazine company profile, Elemental’s revenue was $10.2M in 2011. The company grew their revenue to more than $21M in 2012 and ended the year with more than 250 paying customers. To date Elemental has raised $29M in VC funding and still has more than half of that money in the bank as they are currently losing only $1-$2M dollars a year, with plans to be profitable by 2014. The company counts customers in 40 countries and has content owners like the BBC, HBO, Comcast, and ESPN using their products to create content for multiscreen delivery.
Unlike other vendors in the industry, Elemental does not have plans to grow their business at all costs. While many companies tell me they want to take the Amazon approach of “get big fast” and go out and raise $75-$150M to do so, Elemental doesn’t see the need to burn through a lot of cash to grow their business, instead choosing to grow their business organically and at a sustainable rate.
Elemental’s done a good job of diversifying their revenue regionally with nearly 50% of it coming from outside the U.S. and 35% of their total revenue coming from resellers. An approach that allows them to scale their business without having to use up a lot of capital and have a negative effect on their bottom line.
These days it seems so many vendors are concerned with calling themselves the number one vendor in the market, based on revenue, that they lose sight of the fact that they need to be profitable. Scale is a good thing, but not if it comes at the risk of having to raise four to five rounds of funding and then still be losing money.
Elemental seems to have the right approach to the market, gets really high marks from customers and will be an interesting one to watch in the New Year.