Exclusive: U.S. Online Video Startups Raised $461M in 2007

Profits may not have arrived for online video, but venture capitalists are still happy to pick up the bill. More and more U.S.-based, venture-backed online video companies are attracting more and more financing each year, according to Dow Jones VentureSource. Some $460.5 million was invested in such startups in 2007, up from $266.9 million in 2006. And already, in the first quarter of 2008, another $217.3 million rained down on the category.

In 2007, the money was spread among 68 startups for an average investment of $6.8 million each. That’s compared to 51 startups in 2006 and $5.2 million each, on average. This year, 29 startups have already received funding, and the average amount is on the upswing, too, to $7.5 million. That’s the opposite of broader trends; in the first quarter of 2008, venture funding was down 8 percent year-over-year and 9 percent quarter-over-quarter.

Based on previous years’ data, the first quarter is one of the smaller investment periods in the sector, but then again a troubled economy could slow investment in this economically risky category as 2008 wears on.

Dow Jones was nice enough to run a custom study for us, following up on the 2006 numbers we’d reported on last April. However, this time the firm used a more specific methodology to focus on online video, excluding IPTV platforms and general advertising companies (for instance, two companies included last year were Kasenna and Imagine Communications, not things we’d write about on NewTeeVee).


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