Item 1. Business
Item
1. Business
Overview
Unless
the section herein specifies otherwise, references to the “Company,” “we,” “us” or “our”
are to, (a) prior to the consummation of the business combination (the “Business Combination”) contemplated by that certain
business combination agreement, dated December 1, 2021 (as amended, the “Business Combination Agreement”), by and between
CF Acquisition Corp. VI, a Delaware corporation (“CF VI”), and Rumble Inc., a corporation formed under the laws of the Province
of Ontario, Canada (“Legacy Rumble”), either (i) CF VI or (ii) Legacy Rumble, as the context may require, and (b) following
the closing of the Business Combination, Rumble Inc., a Delaware corporation. Unless the section herein specifies otherwise, references
to “Rumble” are to (x) prior to the closing of the Business Combination, Legacy Rumble and (y) following the closing of the
Business Combination, Rumble Inc., a Delaware corporation. References to “ExchangeCo” are to 1000045728 Ontario Inc., a corporation
formed under the laws of the Province of Ontario, Canada, and an indirect, wholly owned subsidiary of Rumble, and references to “ExchangeCo
Shares” are to the exchangeable shares of ExchangeCo.
Our
Story
Rumble
was founded in 2013, when the concept of ‘preferencing’ on the internet was simple – it was big vs. small. At that
time, it was clear that the incumbent social video platforms were beginning to preference large creators, influencers, and brands, while
leaving the small creator behind and thus, creating a market opportunity. At that time, Rumble was founded based on the premise of providing
small creators with the tools and distribution that they needed to succeed.
Fast
forward to 2020, when a new, and much more nuanced world of ‘preferencing’ was evolving online, which included sophisticated
algorithms used by the incumbents for amplification and censorship. In contrast, Rumble never moved the goal posts on its content policies.
This consistency and transparency, along with tailwinds from the 2020 U.S. election season, led to dramatic growth in Rumble’s
user base from 1.2 million monthly active users (“MAUs”) in Q2 2020 to 21 million MAUs in Q4 2020.
Soon
after this, the preferencing and censorship enforced by the incumbent social platforms continued to expand into many other areas of content,
including but not limited to the crypto-finance community and pop culture. As a result, more creators and their audiences found a new
home on Rumble. These have included top creators, such as Dan Bongino, Russell Brand, Kim Iversen, Dave Rubin, Kimberly Guilfoyle, Glenn
Greenwald, Matt Kohrs, and Dana White, just to name a few. As a result, our user base has more than tripled in three years, growing from
21 million MAUs (UA) in Q4 2020 to 67 million MAUs (GA4) in Q4 2023.
During
this period of accelerated growth, Rumble announced a business combination with CF VI, a special purpose acquisition company, on December
1, 2021. The Business Combination was successfully completed on September 16, 2022, and our Class A common stock, par value $0.0001 per
share (“Class A Common Stock”) began trading on The Nasdaq Global Market (“Nasdaq”) under the symbol RUM. The
Business Combination and related PIPE investment provided Rumble with gross proceeds of approximately $400 million, prior to transaction
expenses. This capital infusion has helped Rumble compete with its big tech and other incumbent competitors. Ultimately, 99.9% of CF
VI shareholders elected not to redeem their shares, which we believe was a strong expression of support for Rumble’s mission, its
growth story to date and its future potential.
With
this capital in place, Rumble set out to execute on a growth strategy with the following four key tenets: 1) invest in content to grow
and diversify the content library and user base; 2) build Rumble Advertising Center, an in-house advertising marketplace and network;
3) create the infrastructure to support the Rumble video platform and future Rumble Cloud go-to-market needs; and 4) hire across the
organization to support domestic and future international growth. Today, Rumble is a high-growth video and cloud services provider on
a mission to protect the free and open internet.
For
further discussion of our key performance indicators, including definitions and explanations of the ways that management uses these metrics
in managing the performance of the business, please refer to the section titled “Key Business Metrics” under “Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
1
Our
Portfolio
Rumble
is comprised of two segments: Rumble Services and Rumble Cloud.
1) Rumble
Services :
● Rumble
Video : a video sharing platform enabled by Rumble.com and its associated mobile and connected
TV applications;
● Rumble
Streaming Marketplace: a multi-platform livestreaming and monetization service for creators
enabled by Rumble Studio;
● Rumble
Advertising Center: an in-house advertising marketplace and network enabled by Rumble
Advertising Center (“RAC”);
2) Rumble
Cloud :
● Rumble
Cloud: an infrastructure as a service (IaaS) offering consisting of a portfolio of compute,
storage, security, and networking offerings.
Rumble
Services
Vision,
Products and Differentiation
Rumble
Services consists of three core businesses: Rumble Video, Rumble Studio, and RAC. The collective vision of Rumble Services is to provide
creators with the best monetization toolkit on the internet. To fulfill this vision, our product roadmap is focused on the progressive
integration of these businesses and underlying products into to a single seamlessly integrated platform, which has the potential to unlock
a variety of differentiated feature sets to users, creators, advertisers, and publishers.
Rumble
Video is enabled primarily through our flagship product, Rumble.com, a free-to-use video sharing and livestreaming platform on which
users can watch, share, like, comment, and upload videos. Users can subscribe to channels to stay in touch with creators and access video
on-demand (“VOD”) and live content streamed by creators. In addition, Rumble Video also offers a premium subscription service
via Locals.com, where users can access certain free content and purchase subscriptions to support creators and access exclusive content
in creator communities. Both Rumble.com and Locals.com are available via desktop and mobile web, iOS and Android mobile applications
(“apps”), as well as connected TV apps including Roku, Apple TV, Amazon Fire TV, LG, Samsung, and Android TV. In aggregate,
Rumble Video provides a platform for creators to benefit from our growing advertising business and revenue share model.
Rumble
Streaming Marketplace is enabled by Rumble Studio, a new, patent-pending application designed to enable a first-of-its-kind livestreaming
and monetization service for creators. Using Rumble Studio, creators can establish a variety of custom settings for their livestream,
set up, go-live and control their livestream across multiple social platforms, while also benefiting from a variety of custom and programmatic
monetization opportunities, including host-read ads and sponsorships. Rumble Studio is currently available via desktop and mobile web,
as well as iOS and Android mobile applications.
Rumble
Advertising Center is our proprietary advertising marketplace and network designed to facilitate transactions for advertisers seeking
to access Rumble.com traffic and also traffic from other publishers in the RAC network. Within the platform, RAC offers a unique set
of advertising opportunities for advertisers, including traditional display and pre-roll/mid-roll video advertising in addition to creator
sponsorships. Furthermore, the automated technology designed to make creator sponsorship opportunities available to advertisers either
programmatically or through direct deals is planned to launch to general availability in 2024, which will be a fully differentiated offering
in the market and augment the current manual sales effort for this revenue stream.
2
The
continued scale and integration of the Rumble Video, Rumble Studio, and RAC platforms will bring a truly differentiated offering to the
market, which is the key to fulfill the Company’s vision of providing the best monetization toolkit for creators on the internet.
How
We Generate Revenue
Our
portfolio of services enables a diversified set of revenue streams, which includes:
● Advertising:
o Banner
/ Display Advertising: offered to advertisers via RAC across our network of publishers, including
Rumble.com.
o Video
Pre-Roll / Mid-Roll Advertising: offered to advertisers via RAC across our network of publishers,
including Rumble.com, and also through custom integrations into live broadcasts.
o Creator
Sponsorships: offered to advertisers via RAC programmatically and through direct sales.
● Subscriptions,
Pay-Per-View and Tipping:
o Subscriptions:
revenue generated from users that subscribe to content creators on Locals.com.
o Badge
Subscriptions: revenue generated from badge subscriptions purchased by users on Rumble.com.
o Pay-Per-View
and Tipping: revenue generated from pay-per-view videos offered by creators and tips given
by users to creators during livestreams.
We
share revenue generated from advertising, subscriptions, pay-per-view and tipping with creators in a revenue-share model.
Sales
& Marketing
A
vast majority of the substantial user growth experienced by Rumble.com between 2020 and 2022 was organic, driven largely through user
and creator advocacy. As a result, very minimal marketing spend was deployed during that time. In 2023, while the organic growth continued,
the Company made several investments to bring in new content creators consistent with our goals during the de-SPAC, which in turn attracted
new audiences to the platform. Going forward, we will look to build our brand across multiple audiences, driving user growth and video
consumption through (1) selective content creator partnerships and advocacy, (2) continued strategies to earn unpaid media coverage and
recognition, and (3) increased marketing spend, primarily through digital paid media channels, particularly as advertising revenues increase.
Our
advertising platform, RAC, is designed as a self-serve platform where advertisers can sign up, build a campaign and bid on traffic leveraging
various targeting tactics. As a result, paid marketing strategies will be employed as inventory is released into the network in an effort
to attract new advertisers into the system. In parallel to this and other growth strategies, we will make continued investment into direct
sales, account management and creator success teams to drive incremental business across display and video advertising, as well as sponsorships.
Lastly,
for creators, the Company made several direct investments into large creators in 2023. These investments helped attract high-profile
creators to the platform given that, at the time, our advertising revenues were minimal and creators’ earnings on the Rumble Video
platform were generally not competitive with the earnings potential offered by the incumbent platforms. With the Company now focused
more on growing the advertising business and driving revenue, we believe that creators are now better-positioned to earn money on Rumble,
which we believe in turn will bring more content and creators to the platform, thereby yielding more engagement and ultimately driving
more advertising revenue.
3
Competition
We
operate in a challenging and rapidly evolving environment. We compete with other online video distribution platforms, including
YouTube, and confront conduct by YouTube and Google that we believe is highly anti-competitive (see Part I, Item 2, “Legal Proceedings”
for further information). We also face significant challenges in obtaining advertising revenue because advertisers have numerous
options for allocating their advertising budgets. Rumble Video seeks to compete with other platforms by establishing and maintaining
trust with our users, creating an enjoyable viewing experience that welcomes a variety of video content. We seek to operate a neutral
video platform in order to meet the challenges presented by Big Tech.
Rumble
Cloud
Origin,
Vision, Products and Differentiation
After
its initial beta phase, Rumble Cloud was launched in Q1 2024, and is an Infrastructure as a Service (IaaS) offering designed to service
a wide variety of businesses from startups to small and medium sized businesses (SMBs) to enterprise clients.
Rumble
Cloud was built based on the following key premises: 1) it was existential for us to invest and build out the infrastructure to support
Rumble Video and insulate ourselves from arbitrarily enforced terms and conditions and unfavorable economics offered by the incumbent
cloud providers, and 2) given the significant amount of compute, storage and bandwidth requirements of Rumble Video, it was a natural
extension of the business to offer excess infrastructure capacity to the cloud market. Moreover, we saw an opportunity to capitalize
on a product-market fit by specifically addressing the chronic customer pain points in the cloud market, including censorship, trust
with data, vendor lock-in strategies, as well as unfair and unpredictable pricing.
Backed
by our mission to protect a free and open internet, the vision of Rumble Cloud is to empower businesses and allow them to take control
of their IT budgets by providing the most predictable and fair pricing model in the cloud market.
Rumble
Cloud launched and currently operates with the infrastructure and essential computing and storage necessary to run a wide array of workloads
and applications, including:
● Cloud
compute;
● Load
balancers;
● Object
storage;
● Kubernetes
orchestration;
● Block
storage; and
● Virtual
private cloud.
With
Rumble Video as the first anchor tenant of Rumble Cloud, we built our infrastructure from the ground up to run on the latest generation
equipment, including 4th generation AMD EPYC processors. In addition to NVMe SSDs, Rumble Cloud virtual machines run atop fully dedicated
vCPUs, ensuring fast and consistent performance.
4
How
We Generate Revenue
Rumble
Cloud launched and currently runs on a subscription model. Relative to the unpredictable and volatile consumption-based pricing models
that can cripple a business due to rampant hidden and unexpected costs, Rumble Cloud introduced the concept of a Resource Tier pricing
model, which is designed to provide a transparent and predictable pricing model to its customers and offers unlimited usage within a
given pool of hardware resources for a fixed monthly price. With Rumble Cloud’s Resource Tiers, customers will have the freedom
to grow and scale at a pace that works best for their needs, without surprises on their monthly bill.
Sales
& Marketing
The
front end of Rumble Cloud, rumble.cloud, is designed to support a self-serve customer acquisition model. Marketing efforts
will be focused on attracting leads and converting through the marketing funnel via traditional paid, earned and owned media strategies.
Rumble’s video business has cultivated an ecosystem of tens of millions of users and creators. Activating this community is a core
piece of our marketing strategy for Rumble Cloud.
To
complement the self-serve customer acquisition component, we plan to drive demand for Rumble Cloud using a direct sales and channel partner
approach. Channel partners will include referral, reseller and managed service partners, who are well positioned to help us expand our
mid-market, enterprise and specialty segments.
Competition
We
operate in a challenging environment, with a majority of the cloud services market owned by the major cloud hyperscalers, Google Cloud,
Microsoft Azure and Amazon Web Services. These companies have significantly greater resources than us and significant existing customer
bases that may be difficult for us to penetrate, especially given the potential for high switching costs in the cloud services market.
Given the market trends of rising multi-cloud strategies and continued complexity and unpredictability in cloud pricing, Rumble Cloud
arrives at an opportune time to enter the market and present a new way for businesses to save money and regain control of their IT budget.
Human
Capital
We
believe that our employees are our most significant resource. As of December 31, 2023, we had 158 full-time employees, of whom 37 were
based in Canada and 121 were based in the United States. None of our employees are covered by collective bargaining agreements. We believe
we have good relationships with our employees. Our human capital resources objectives include identifying, recruiting, retaining, incentivizing,
and integrating our existing and additional employees. The principal purposes of our equity incentive programs are to attract, retain,
and motivate key employees and directors through the granting of stock-based compensation awards.
Government
Regulation
We
are subject to domestic and foreign laws that affect companies conducting business on the internet generally, including laws relating
to the liability of providers of online services for their operations and the activities of their users.
Because
we host user-uploaded content, we may be subject to laws concerning such content. In the U.S., we rely, to a significant degree, on laws
that limit the liability of online providers for user-uploaded content, including the Digital Millennium Copyright Act of 1998 (“DMCA”)
and Section 230. Countries outside the U.S. generally do not provide as robust protections for online providers and may instead regulate
such entities to a higher degree. For example, in certain countries, online providers may be liable for hosting certain types of content
or may be required to remove such content within a short period of time upon notice. As we expand internationally, we or our customers
may also be subject to additional laws that regulate streaming services or online platforms.
5
Because
we receive, store and use a substantial amount of information received from or generated by our users, we are also impacted by laws and
regulations governing privacy and data security in the U.S. and worldwide. Examples of such regimes include Section 5 of the Federal
Trade Commission Act, the EU’s General Data Protection Regulation (GDPR), and the California Consumer Privacy Act (CCPA). These
laws generally regulate the collection, storage, transfer and use of personal information.
Because
our platform facilitates online payments, including subscription fees and tipping, we are subject to a variety of laws governing online
transactions, payment card transactions and the automatic renewal of online agreements. In the U.S., these matters are regulated by,
among other things, the federal Restore Online Shoppers Confidence Act (ROSCA) and various state laws.
As
a U.S.-based company with Canadian operations, we are subject to a variety of Canadian laws governing our foreign operations, as well
as Canadian and U.S. laws that restrict trade and certain practices.
Intellectual
Property
Our
intellectual property includes trademarks, such as RUMBLE in the United States and Canada, pending international applications
to register the trademark RUMBLE , and several pending U.S. trademark applications, including applications for LOCALS , RUMBLE
CLOUD , RUMBLE STUDIO , and RAC ; the domain names rumble.com and locals.com ; copyrights in
our source code, website, apps and creative assets; a pending patent application for technology related to Rumble Studio; and trade secrets.
In addition, our platforms are powered by a proprietary technology platform.
We
rely on, and expect to continue to rely on, a combination of work for hire, assignment, and confidentiality agreements with our employees,
consultants, and third parties with whom we have relationships, as well as trademark, trade dress, domain name, copyright, and trade
secret laws to protect our brands, proprietary technology, and other intellectual property rights. We intend to continue to file additional
applications with respect to our intellectual property rights.
Acquisitions
In
October 2021, we bolstered our value proposition for content creators by acquiring Locals, a solution for (1) creators looking to monetize
their content through subscription, and (2) for users to gain access to premium content from their favorite content creators. The acquisition
was designed to accelerate our subscription revenue model and brought approximately 86,000 subscribers to our platform. Prior to our
acquisition of Locals, we did not offer a consumer-facing subscription service.
In
May 2023, we acquired Callin, a San Francisco-based podcasting and live streaming platform founded by technology entrepreneur and investor
David Sacks. Callin’s technology laid the foundation for Rumble Studio, which was launched in Q1 2024.
In
October 2023, we acquired North River Project Inc., an entity created to develop what became RAC, an advertising technology solution,
specifically for Rumble. RAC includes an advertising marketplace and network between advertisers bidding and publishers selling display
and video advertisement as well as advertisers bidding on creator sponsorships. RAC continues to be enhanced and represents a significant
milestone in Rumble’s monetization efforts.
Terms
of Service
Our
content policies, which are available at rumble.com/s/terms , contain politically neutral terms that ensure a safe and respectful
exchange of views on the Rumble platform. Among other things, they prohibit content that infringes on the rights of third parties, violates
any law, is pornographic or obscene in nature, promotes or supports violence or unlawful acts (including content that promotes or supports
Antifa, the KKK, white supremacist groups, and entities designated by the U.S. or Canadian government as terrorist organizations), or
exploits minor children (including disclosing personally identifiable information about minor children).
6
Our
website address is included in this report for informational purposes only. Our website and the information contained therein or connected
thereto are not deemed to be incorporated by reference in, and are not considered part of, this Annual Report on Form 10-K.
Available
Information
All
periodic and current reports and other filings that we are required to file with the SEC, including our annual report on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant Section 15(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”), as amended, are available free of charge from the SEC’s website ( www.sec.gov ).
Such documents are available as soon as reasonably practicable after electronic filing of the material with the SEC. Copies of these
reports (excluding exhibits) may also be obtained free of charge, upon written request to: Rumble Inc., 444 Gulf of Mexico Dr, Longboat
Key, Florida 34228.
We
also post our Code of Ethics on our website. See Part III, Item 10 for more information regarding our Code of Ethics.