Boxee Gets $16.5M in Funding, Reveals Box 2.0 Plans

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Boxee is announcing a 16.5 million Series C round of funding Tuesday, with new investors Pitango and Softbank joining existing investors General Catalyst, Spark Capital and Union Square Ventures.

The New York-based startup didn’t break down the investment any further, but VP of Marketing Andrew Kippen told me in a phone interview what the money is for: Boxee is growing its headcount from 34 to at least 44 employees with new hires across the board, is working actively on additional content partnerships, and is already cooking up plans for the next version of its Boxee Box.

“We are trying to figure out how to make Boxee input one,” said Kippen, explaining that the company is looking at solutions that would make it possible for users to seamlessly switch between TV content and the Boxee platform without changing the input on their TVs.

Sound familiar? That’s probably because Google TV has been offering a similar solution on devices from Logitech and Sony, albeit with a slightly awkward setup: Users of the Logitech Revue set-top box need to have a cable box to access TV content — a solution that wouldn’t go over well for many of Boxee’s cord-cutting users. Kippen didn’t want to go into any further details, but he gave me one more nugget that could get Boxee Box users as well as developers excited: The next iteration of the platform will make it possible to directly interact with TV content, he said.

Of course, we won’t see Boxee Box 2.0 anytime soon. Kippen said that further plans for the product won’t be revealed until much later this year. Right now, the company is focusing on the current version with improvements to the web browsing experience like faster page load and better Flash playback.

Boxee launched its first hardware product together with D-Link last November, and additional products running the Boxee platform from Iomega and Viewsonic are expected to launch in the coming months. Kippen didn’t provide me with any information about the number of units sold so far, but he claimed it beat D-Link’s expectations. “We sold out the first batch of produced units,” he told me.

However, Boxee hasn’t seen any revenue from those sales. The company isn’t charging D-Link and other hardware partners any licensing fees. It expects to bring in some revenue with a payment platform scheduled to launch in Q2. That platform will initially enable content providers to charge subscription fees, with pay-as-you-go options added later. Boxee will get a 20 percent cut of any transaction.

Boxee’s hardware launch wasn’t without hiccups: Not every user appreciated the platform’s new UI and functionality, and Netflix content wasn’t available until just a few weeks ago. Kippen said the company is now looking to add more content for European users, as it has seen “high demand” for the Box in Germany, the U.K., Sweden and Norway.

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