Rutberg & Co. research says a large portion of August VC money went to young digital media companies focusing on video

September 25, 2006

2 Min Read
Video Startups Top VC Funding

A growing number of venture capital investments seem to be finding their way into the coffers of young video-related companies these days.

Almost a third of the “digital media” companies that received venture capital funding during August are focused on producing, enabling, transporting, or hosting video, according to a recent research report from the San Francisco investment bank Rutberg & Co. (See LR Ranks Video Sharing Sites and Video Caching Steps Into the Limelight.)

Rutberg researchers say a total of 36 digital media companies announced funding rounds in August, of which fourteen were video-related.

"We find that venture funding activity in video-related companies is driven by, among other factors, investment theses in user-generated content and other personal media," says Rutberg digital media analyst Peter Daley. (See Video Sharing: Show Me the Money.)

“A steady stream of broadband video initiatives by incumbent media companies, coupled with strong usage growth, advertiser interest, the proliferation of video capture devices, and innovation in video editing tools, is providing a strong basis for investment activity in this segment,” Daley tells Light Reading. (See Is AT&T Eyeing Eyespot?)

Video-related companies racked up a total of $118.4 million in VC funding during August, or 28.8 percent of the $415.4 million total doled out to digital media companies.

Funding rounds for such companies during August weren't unusually large, but they were numerous. Some of the largest ones included:

  • BIAP Systems Inc. of Plano, Texas, which provides video servers and other software to content developers, took a cool $20 million from Sevin Rosen Funds and SCP Partners. (See BIAP Raises $20M.)

  • The high-definition (HD) video surveillance company CoVi Technologies, based in Austin, Texas, collected $15 million from Polycom Inc. (Nasdaq: PLCM) and a small group of VCs.

  • The Herndon, Va.-based Ruckus Network , which sells VOD servers for college campuses, collected $13.7 million in new funding from Battery Ventures , Eastward Capital Partners , Pinnacle Ventures , and Shelter Capital Partners . (See Top Ten Movers & Shakers in Telecom.)

  • Burlingame, Calif.-based personal video search company MeeVee took $8 million from Bay Area Equity Fund (managed by JP.MorganChase ). MeeVee provides personalized search for TV programs and online video programming.

    — Mark Sullivan, Reporter, Light Reading

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like