IAC announced plans to spin off its full stake in Vimeo, the video hosting and software company, to IAC shareholders.

In November, IAC announced that Vimeo had a $2.75 billion valuation after raising about $150 million from Thrive Capital and GIC.

IAC, headed by chairman Barry Diller, said Vimeo has seen a surge demand in 2020 driven by the COVID pandemic. Vimeo has 1.5 million paying subscribers, including more than 3,500 enterprise customers including Amazon, Starbucks, Deloitte, Rite Aid and Siemens. According to IAC’s third quarter 2020 financial results, Vimeo was profitable in Q3 (on an adjusted basis) and grew overall revenue 44% year over year.

IAC shares rocketed up more than 14% in early trading Tuesday on the announcement.

For the first nine months of 2020, Vimeo revenue was $199.4 million, up 41% from the comparable year-earlier period. Vimeo narrowed its operating loss to $25.6 million for the first three quarters of 2020, compared with a net loss of $40.6 million for the first nine months of 2019.

IAC expects the Vimeo spinoff to occur in the second quarter of 2021, if the transaction is approved by shareholders. Upon completion, Vimeo would become an independent, separately traded public company

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“The combination of Vimeo’s remarkable growth, solid leadership position, and enormous market opportunity have made clear its future,” IAC CEO Joey Levin said in announcing the spinoff plan. “It’s time for Vimeo to spread its wings and become a great independent public company.”

With the proposed spinoff, Vimeo CEO Anjali Sud (pictured above) would remain at the helm. “We have long believed in the power of video to advance human expression and transform businesses,” Sud said in a statement. “Today we have a rare opportunity to help every team and organization in the world integrate video throughout their operations, across all the ways they communicate and collaborate.”

Vimeo would be the 11th company to get spun out from IAC and its predecessors. Over the years, Diller’s holding company has spun off businesses including Match Group, Expedia, LendingTree, HSN (now part of Qurate), Ticketmaster (now part of Live Nation Entertainment) and ANGI Homeservices.

Under the terms of the proposed transaction, IAC stockholders would receive a proportionate amount of Vimeo stock and it’s structured to qualify as tax-free to IAC and its stockholders for U.S. federal income tax purposes. The spinoff is subject to conditions including final approval by IAC’s board of directors, approval of the separation proposal by IAC stockholders, and receipt of a tax opinion from the IRS.