Toronto-headquartered YouTube competitor Rumble is receiving a fresh strategic investment of $775 million from Tether, the stablecoin giant with over 350 million users around the globe. The free-to-use video-sharing and web hosting provider plans to allocate $250 million of the proceeds to support growth initiatives. The remaining funds will be used for a self-tender offer of up to 70 million shares of its Class A Common Stock. The company CEO, Chris Pavlovski has committed to tender and does not intend to sell more than 10 million shares of Class A Common Stock.
Founded in 2013, Rumble will not have any Tether representatives on its board, and the blockchain-enabled platform will hold only a minority position in the outstanding common stock. Meanwhile – with over 67 million monthly active users in September – Rumble’s shares surged by 41% in after-hours trading, reaching $10.13. According to the company, Tether is offering $7.50 per share for its stake in this deal.
“This transaction provides an immediate liquidity event for all of our stockholders who elect to participate in the self-tender offer. I truly believe Tether is the perfect partner that can put a rocket pack on the back of Rumble as we prepare for our next phase of growth,” Rumble’s Chairman and CEO Chris Pavlovski said while commenting on the development. This also benefits Pavlovski, as he will retain his controlling stake after the completion of the transaction.
According to the agreed terms, Tether has agreed to purchase 103,333,333 shares of Rumble Class A Common Stock at a price per share of $7.50. This investment from Tether comes at a time when the crypto market is gaining rapid momentum, as U.S. President-elect Donald Trump seems to support (and even promote) the digital currency domain.
Turning to Rumble itself, the platform started as an alternative to YouTube for small content creators and also offers web hosting and cloud services. According to the company, it opposes censorship and prides itself on being one of the few ‘neutral’ and ‘independent’ platforms. It also claims that the platform is immune to cancel culture. As noted earlier, the platform is free to use however, in 2021 the company acquired Locals, which allows users on Rumble to buy subscriptions to access exclusive content.
On the financial part, Rumble’s revenue for the quarter ending September 30, 2024, reached $25.06M, reflecting a 39.34% growth. The company’s total revenue for the past year stands at $85.65M, a 6.36% increase year-over-year. In 2023, the firm achieved an annual revenue of $80.96M, marking a growth of 105.57%.
