Wowza Takes "Significant Investment" from Boston-Based Private Equity Firm
Wowza Media Systems has taken "a significant investment" from Boston-based private equity firm Clearhaven Partners. Since the financial terms are not disclosed, and Clearhaven is a relatively new firm (founded in 2019), we really don't have a lot more hard data to share beyond some snippets from the press release and some comments from Wowza CEO David Stubenvoll (pictured above).
That said, this doesn't mean that the investment isn't big news, both for what it might enable Wowza to do down the road and to celebrate Wowza's accomplishments over the last 15 years. So we'll spend a bit more time on what you can glean from the press release, talk a bit about Wowza's colorful backstory, and share some of our conversation with Stubenvoll.
Scanning the Press Release
In the press release, Chris Ryan, managing partner at Clearhaven Partners, shared that "Among many companies we see each year, Wowza stood out to us due to its reputation as a technology leader and its ability to deliver market-leading video streaming solutions at scale in a market with significant tailwinds." The release further states that "Clearhaven's investment positions Wowza to accelerate innovation of Wowza's leading solutions known for helping customers solve their complex video workflow challenges."
Hey, I told you there wasn't a lot of hard data there.
The Backstory
Forgive me an indulgence here and let me ramble. Of all the companies in the streaming industry, Wowza is the one that feels most personal, at least for me, and its accomplishments are something that I celebrate like I would those of a nephew or best friend's daughter. It's hard to get excited about established tech companies like Google or Microsoft, or behemoths like Netflix or Amazon.
But Wowza was founded by two of us, David Stubenvoll and Charlie Good, both Adobe alums. During Wowza's nascent stages, they directed one of the most consequential streaming-related product pivots of all time, launching their company to distribute a video messaging platform, then changing their focus to the media server they developed to drive that platform when the media server generated more interest than video messaging. Thus, Wowza Media Systems was born.
Wowza didn't invent transmuxing (also called on-the-fly or dynamic packaging), but it was one of the first to commercialize it at scale, paving the way for streaming publishers to efficiently support multiple ABR packaging formats like HLS, DASH, HDS, and MSS. They became so successful that they overshadowed the Adobe Flash Media Server, leading Adobe to sue Wowza in 2011. But David slew Goliath yet again, and in 2015, Adobe's claims were "settled and dismissed with prejudice." In short, Wowza was birthed and grew up right in front of our eyes, becoming, in the words of the press release, "the gold-standard for live streaming solutions and today powers more than 6,000 active customers with a track record of more than 35,000 deployments worldwide."
CEO Interview
By way of background, I was not originally scheduled to talk to CEO David Stubenvoll; I stepped in when editor Eric Schumacher-Rasmussen took his cat to the emergency room for a cut paw (the cat survived and is doing well). I know Stubenvoll well enough to shake hands at a trade show, but we're not on each other's holiday card list (if those are still a thing).
After Stubenvoll described the investment, I asked "Why would Clearhaven invest in a company about to be obsoleted by CMAF?"—half joking, but genuinely interested in his response. For those not up to the millisecond on the Common Media Application Format, the CMAF container format has the potential to eliminate the need for transmuxing, one of the major features of the Wowza Streaming Engine and Wowza Streaming Cloud, two of Wowza's most significant products.
Stubenvoll laughed, and considered, and then responded, "That's partially true. CMAF may reduce the need for some product features, but we've innovated far beyond transmuxing in our current products, and this investment will allow us to go much further much faster."
Here are some of the other questions we addressed.
Streaming Media: Why take an investment? Why not go public?
Stubenvoll: We never considered going public. This investment and partnership gives us flexibility to invest on a much broader scale without the restrictions and hassle of being a listed company.
Streaming Media: What about employees and their stock options? Don't companies go public so employees can profit as well?
Stubenvoll: Clearhaven is purchasing shares and options, which allows employees to cash out of their options and stock.
[Author's note: To understand the following, note that Wowza started selling the Wowza Streaming Engine, which is server software that customers can rent or buy, and then install and operate themselves. Then Wowza launched Wowza Streaming Cloud, a managed service which is based upon the Wowza Streaming Engine.]
Streaming Media: What will you use the money for?
Stubenvoll: Accelerating innovation and growth. That means more investment in the cloud, to make our SaaS service a superset of the features offered by Wowza Streaming Engine. We've been investing in this for a while, and customers will start to see the benefits this year in the form of a better integrated bundle of products and services that are highly reliable and scalable, and the ability to drive more configurations without coding. We're also extending the cloud service to better integrate into the customer's data set and workflows/processes, and to extend features like multiple cloud support with automatic switchover should one cloud fail.
Beyond investing in existing products, we're analyzing our enhanced go-to-market capabilities now; this could take the form of company or product acquisitions, or could involve opening up new offices if it helps develop and maintain deep relationships with our customers.
Streaming Media: What's in it for Clearhaven?
Stubenvoll: Wowza's a great investment. We've been growing and profitable for a long time. It's no secret that they're going to need an exit strategy, which could be a public offering or sale. It's too early to say what the proper exit is but there will be an exit at some time.
Streaming Media: What else do Streaming Media readers need to know?
Stubenvoll: There will be no layoffs. Every time I bring up private equity investment, someone suggests that layoffs or some form of contraction are coming. In this case, it's the opposite; Clearhaven is allowing us to invest and accelerate our growth.
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