Updated with corrected proceed amount
Video ringtone company Vringo, which has a library of more than 4,000 video ringtones, has filed to raise about $10 million in net proceeds in an IPO. The company plans to use the proceeds, in part, for general corporate purposes, sales and marketing and research and development.
The company provides a platform that allows users to create, download and share video ringtones for mobile phones. Until recently, the video ringtones have been offered free to consumers, but in its SEC filing, the company says it is moving to a paid service model with mobile carriers and other partners around the world.
Vringo’s business model calls for revenue sharing with its mobile carrier partners using a subscription-based model where users pay a monthly fee for access to the services as well as additional fees for premium content. The company has launched its service with mobile carriers in Turkey, Malaysia, Armenia and United Arab Emirates.
Generally, the company aims to sell the monthly subscription for between $1 and $3 and expects to receive between 30 percent and 50 percent of the monthly subscription revenue.
The company has raised about $17.5 million since its inception in 2006 and has recorded losses since that time.
The filing notes that the ringtone industry was created in 1997 with the first sales of polyphonic ringtones and further developed in 2002 with the creation of the truetone or mastertone. While not a lot of new things have happened in the ringtone market lately, the company believes the market is ready for the next evolution of products and services.
Vringo’s application currently supports more than 200 handsets and the company says it is certifying new mobile handset devices as quickly as possible. The WAP version of its service is compatible with almost any device that supports video.
The company also says it has managed to create video ringtone applications that work on BlackBerry, Android and Windows Mobile operating systems even though those platforms do not natively support video ringtones.