PeerApp announced today it has raised $8 million in Series B funding from return investors Pilot House Ventures, Cedar Fund and Evergreen Venture Partners. The company had previously raised $3 million in January.
PeerApp offers ISPs an appliance to cache popular downloads to reduce their bandwidth costs from peer-to-peer file-sharing. It’s not an original concept; CacheLogic used to do this but since changed its name to Velocix and got into the CDN biz. But the idea is still appealing: P2P may make file transfer more efficient for end users, but for ISPs it often means lots and lots of burdensome redundant traffic of large files, a.k.a. video. PeerApp’s caches also benefit end users by making file transfers faster.
The Newton, Mass.-based company, whose product has been out since 2006, said it needed money to market its product globally and meet increasing demand. The company has some 100 deployments of its “UltraBand” systems, and recent customer wins include Guangzhou Radio and Television in China and IFX Networks in Latin America.
Update: We called PeerApp to find out how it had sustained itself in business since 2004 yet only raised funding this year, but the company declined further comment. PeerApp spokesperson Mark Strangio was able to give more detail about PeerApp’s customers, saying they are primarily outside of the U.S. and Europe, where transferring video is hugely expensive for service providers. Customers are willing to pay for UltraBand because it can provide a return on investment within nine months, according to Strangio.
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