With the launch of its service and video network, Cambridge, MA-based broadband video startup Brightcove is looking to raise a substantial round of capital, sources within the investment community say.
According to our sources, the company is looking to raise just over $55 million in fresh capital, give or take a few million. That kind of money would give the company a post-money valuation well north of $225 million range, sources say.
This would be the Series C round of funding for the company that has already raised over $21 million in two rounds. General Catalyst Partners and Accel Partners invested $5.5 million in the first round of funding. In November 2005, several other investors including IAC, AOL, Hearst Corporation and Allen & Company invested $16.2 million in the second round. It also counts Barry Diller, the media powerhouse as one of its board members.
Morgan Stanley and Allen & Company are acting as bankers for the company. We contacted Jeremy Allaire, chairman and chief executive of Brightcove, but he declined to comment.
The sale of YouTube to Google for $1.65 billion has energized the investor interest in the broadband video space. The deal has also made large media companies including the New York Times, CBS and several others take online video market very seriously, and at the same time defend their turf.
Brightcove, often misunderstood, is the perfect answer for most of the large media companies. After various conversations with Allaire over a period of time, I have come to view Brightcove as a broadband-equivalent of a cable system, which allows anyone to publish, and monetize their video content. It is a publishing platform, a network, and a distribution channel, all at the same time.
Allaire outlines the company and its strategic vision on the company blog. It is an excellent even if long winded primer on the company, which had done a good job of balancing the arcane demands of large media owners, small content creators and users, though it is not as widely known as some of the other online video services.
Those familiar with company plans say that the new cash will be used for marketing and increasing the heft of the Brightcove network, both from sales and talent perspective.