Tubi TV, a free ad-supported video streaming service that shows old movies and TV shows, is in talks to raise around $150 million in a new round of funding, according to two people familiar with the plans. If successful, it would be by far the largest round raised by the service and would signal the interest investors have in the ad-supported part of the video streaming market.
Tubi TV is one of a number of companies that have emerged in recent years, also including Pluto TV and Xumo, offering a free alternative to subscription video streaming services like Netflix and Hulu. The free services typically license older programming from studios on a “non-exclusive” basis, which means it is often available elsewhere. Like their better-known paid-subscription rivals, apps for Tubi and its peers often are preinstalled on web-enabled TVs and streaming devices like Rokus and FireTVs.
Tubi TV, one of a number of free ad-supported video services, is looking to raise $150 million. It has experienced strong growth in viewership, a sign that more TV viewers are switching to streaming services.
Tubi has previously raised $35 million from backers that include MGM, Lions Gate Entertainment and several venture capital firms. Earlier this year it arranged a $25 million credit facility with Silicon Valley Bank. Part of the newly raised capital will be used to buy out some of the company’s existing investors, according to one of the people familiar with the deal. A spokesman for Tubi declined to comment.
The company, which was formed in 2011 and launched its Tubi app in 2014, has reported substantial growth in the past year. In January it announced that the number of hours people spent watching content on the service grew by more than four times last year compared to 2017 and in May said it had 20 million monthly users. It also expanded the service beyond the U.S. and Canada into Australia.
The free ad-supported tier of video streaming has attracted growing interest from bigger companies. Roku and Amazon have introduced their own free ad-supported services. Earlier this year, Viacom acquired Pluto TV for $340 million. Before it did that deal, it took a look at acquiring Tubi, as we reported at the time.