Browser-based streaming media service Boxee has raised $6 million in a second round of funding. General Catalyst Partners led the round — managing director Neil Sequeira is joining the board — with previous backers Union Square Ventures and Spark Capital also participating. Boxee has raised $10 million in funding since its soft launch last year; its first round, worth $4 million, came in November.
I asked CEO Avner Ronen whether the startup had already burned through all of that cash; he said no — and that Boxee took the new money to help ramp up both tech and business development. Ronen said General Catalyst’s experience with other new media startups made the VC firm’s investment offer more attractive: He’s hoping that Sequeira’s influence will help Boxee broker better content deals with media companies in advance, so that it can avoid the rights restriction issues that forced Hulu to pull all its content from the service.
Despite its Hulu problem — a situation Ronen said hasn’t changed — Boxee has continued to add more content. It struck a live-streaming deal with MLB.tv in June, and the service supports around 150 apps from other companies like Current.tv, Pandora, Last.fm and *Netflix*. Ronen said making it much easier for content owners and developers to create Boxee apps was a priority, so the startup plans to double its team to around 20 employees, mostly adding bodies on the tech side.
Boxee will also add a business development exec or two, though, as Ronen said getting the software embedded into web-enabled TVs was a major part of the startup’s growth strategy. “That’s how we get Boxee into millions of homes,” he said. Currently, Boxee has about 600,000 users, 90 percent of whom connect it to their TV using a computer. Ronen said it needs to less complicated than that if Boxee’s browser is going to really compete with other streaming media services or set-top boxes; the goal is to get Boxee on “at least a couple of devices” in 2010.
Ronen said he didn’t think of startups like ZillionTV or even Netflix-backed Roku as Boxee’s main competition: “Our biggest competitors are Microsoft (NSDQ: MSFT) and Apple (NSDQ: AAPL), because they have both the hardware and the software,” he said. “AppleTV may not have been a huge success so far, but I wouldn’t write them off; Microsoft has Xbox and Windows Media Center. So we need to be like the Firefox of the space and attract users that are looking for a more open, aggressive type of streaming media solution.”
As for making money, Ronen said the team is working on developing payment options so that content providers can charge per-viewing or subscription-based fees for their shows; the goal will always be to let consumers access Boxee for free — but get a rev-share if they’re paying for the content. Ronen also said lead-generation deals could be an option; if Boxee drives new viewers to an online series, for example, the content company could offer an ad revenue share.