The children's hit show CoComelon has been a true blessing for busy moms and dads. With over 119 million subscribers, CoComelon's Youtube page entertains kids worldwide while parents go about their day. CoComelon has also been a blessing for the show's parent company Moonbug Entertainment, which is now looking to capitalize on the show's enormous success by either selling or going public. The company appears to be seeking a valuation of $3b, but if it decides to go public, executives believe the valuation could be significantly higher than that.
Despite the hefty price tag, Moonbug could attract some serious interest due to its optimistic growth projections. The company is currently on pace to generate $100m in profit this year and expects to double this number in 2022. In addition, its recent partnership with Netflix (NFLX) to launch a three-season spinoff has enticed potential buyers. On top of this, Moonbug is looking to buy new shows and license them to distributors worldwide. Together with the sale of merchandise from the popular show, this move should help sustain the company's ambitious projections.
Why it matters
Since the start of 2020, demand for children's content has grown by nearly 58% as the rise of new streaming services has reduced the number of children's shows on traditional TV networks. This situation gave rise to several M&As in the show business, with independent streaming companies like Moonbug looking to cash in.
