Elemental Technologies announced that it has closed a $15m series D funding round, led by led by Australian telco giant, Telstra, who in August 2014 acquired online video platform provider Ooyala for $360m.
The company says it will use the funds to “accelerate worldwide growth and expand its suite of software-defined video (SDV) solutions to support the whole of the IP video delivery chain.”
Joining Telstra in the series D funding is leading European pay TV and broadband provider BSkyB, along with existing Elemental investors, General Catalyst Partners, Norwest Venture Partners and Voyager Capital; also participated in the funding round. Missing from this list is Disney-backed Steamboat ventures, which participated in Elemental’s previous investment rounds.
The deal brings the total amount of funding raised by Elemental to just under $45m. In May 2012 Elemental announced it closed a $13m fundraising round led by Norwest Venture Partners (NVP). In 2010, the company closed a $7.5 funding round, led by General Catalyst, Voyager Capital and Steamboat Ventures.
Elemental did not provide details on the company’s valuation following the deal, what percentage of the company is now owned by Telstra and Sky, or whether the company’s existing investors have maintained their same percentage ownership after the latest deal.
However, a press release from Sky, indicates the pay TV platform has invested $4m into the company though its “ongoing program of investing in innovative startups” that to date include cross-platform network Whistle Sports; online video aggregator Pluto.TV, and US ad tech firm Sharethrough.
According to published reports, Elemental had 142 employees and revenue of $32.3m for the full year 2013, and had grown top-line revenue by 887% over the previous three years. The company says its products have been adopted by more than 600 customers in more than 55 countries.
Although there are no financial metrics available for 2014, during an April 2014 panel of vendor CEOs that I moderated as part of Shifting Media Economics: Impact on Strategy, Finance, and Technology, which is co-produced by Devoncroft and the NAB Show, Elemental founder and CEO Sam Blackman told an audience of nearly 400 industry executives that he expected his company to achieve growth of more than 50% this year.
The fact that very large end-users are investing in Elemental is an interesting development.
According to a statement, Telstra has started to roll out 4G LTE services on new 700MHz spectrum to deliver ultra-fast mobile data speeds, and the telco plans to “leverage the entire Elemental product line, with a specific focus on Elemental Delta for its next-generation content delivery services.”
“With its software-defined video processing and delivery solutions, Elemental is at the forefront of video delivery and the evolution of content monetization. Our investment in Elemental will enable Telstra to create value for our global media customers,” said Mark Sherman, Global Enterprise and Services Managing Director, Ventures, for Telstra. “Elemental’s unique offer provides the flexibility and scalability to ensure a great customer experience despite high network traffic demands.”
Sky says that is investment in Elemental “will give the company valuable access to an entertainment company that is at the forefront of multi-platform, multi-device video – delivering OTT content at scale to millions of customers.”
Emma Lloyd, Sky’s Director of Corporate Business Development and Startup investments, said “Internet-delivered video is fundamental to Sky’s business and will continue to grow in importance as more and more customers access content across multiple screens and devices. By investing in Elemental, we not only strengthen our existing commercial partnership, but we have the opportunity to share perspectives and insight into how the combination of new technologies and changing customer demands will shape the video landscape of the future.”
Elemental’s take on the deal was outlined by Blackman in a blog post published today, which says:
“As with any financing round, the timing and the deal need to be right. But fundamentally, it boils down to a shared belief that we can all evolve faster if we’re strategically aligned around a core goal of transforming the media landscape. In many ways, 2015 will mark an inflection point for the video industry as content creators and aggregators deliver ever-more innovative multiscreen services. Furthermore, as the number of video-capable IP devices heads to 15 billion according to Ericsson, next-generation software-defined video infrastructure is required to support gigascale video distribution
With an industry inflection point upon us, this alignment among market leaders will speed the transition to software-defined video architectures. For Telstra, Elemental’s video solutions are fundamental to its next-generation network strategy, which it is rapidly evolving to software, virtualization and cloud-based workflows. As our shared news today indicates, Telstra will use Elemental products across its large portfolio of media properties. For Sky, Elemental solutions support its current multiscreen OTT Sky Go properties, and as SDV architectures continue to mature, we believe there will be additional opportunities to collaborate in the future.
Together, Telstra, Sky and Elemental can further the progress towards a shared vision of software-defined video solutions that are highly scalable, flexible and upgradable and which lower the barriers to bringing content to any device.”
Today’s Elemental announcement is the latest in a series of deals related to online video and transcoding. As broadcasters and media companies scramble to deploy multi-screen services, transcoding is seen by many as a key technology. As a result, transcoding has also attracted its fair share of financing and M&A activity. Here’s a quick run-down of some of the recent transcoding deals and related-financial news:
- In September 2014, Telestream announced that its transcoding and workflow revenue increased by 40 percent in 2013 versus 2012
- In April 2014, Imagine Communications acquired Digital Rapids for an undisclosed amount
- In April 2014, Dalet acquired Amberfin for an undisclosed amount
- In January 2013, Amazon unveiled its “Amazon Elastic Transcoder.” Based on the company’s Amazon Web Services (AWS) cloud computing platform, the Elastic Transcoder the service provides “a highly scalable, easy to use and a cost-effective way for developers and businesses to transcode video files from their source format into versions that will playback on devices like smartphones, tablets and PCs.”
- In August 2012 Brightcove bought Zencoder, a 2-year old start-up with $2m in revenue for $30m, and subsequently launched a cloud based transcoding service at IBC 2012
- In May 2012, Elemental Technologies closed a $13m fundraising round led by Norwest Venture Partners (NVP), which brought the total amount of funding raised by Elemental to just under $30m.
- In April 2012, audio processing specialist Wohler bought transcoding provider RadiantGrid in a move that the company said will accelerate its move into file-based operations
- In February 2012, Elemental Technologies disclosed that its revenue in 2012 had doubled to $21m thanks to high demand for its transcoding technology
- Envivio had an initial public offering led by Goldman Sachs
- Envivio closed a $16.5m funding round in January 2012, bringing the total raised to $95.1m
- PE firm Thoma Bravo bought out Telestream in December 2011
- Telestream bought fellow transcoding vendor Anystream in September 2011
- Cisco bought Inlet Technologies for $95m in February 2011
- Elemental Technologies closed a $7.5m fundraising round in 2010, bringing the total raised to more than $14m
- RGB Networks bought transcoding vendor Ripcode in 2010
Press Release: Elemental Fuels Global Ambitions with $14.5M in Telstra-led Financing
Sky Press Release: Sky Invests in Multiscreen Video Leader Elemental
© Devoncroft Partners 2009 – 2014. All Rights Reserved.