Deal Radar 2008: FeedRoom

This story was written by Sramana Mitra.
FeedRoom provides media houses, publishers, government agencies, and enterprises with white-label video sites. FeedRoom's core technology gives users access to a strong infrastructure, and their services provide users with what they need from content management to front-end application, as well as distribution and sharing tools to run a successful web video program.It also offers a complete set of features including RSS feeds, video blogging, podcasting, and SEO.

The company was founded in 1999 and is headquartered in New York City, with offices in Larkspur, California and Toronto, Canada. CEO and president Mark Portu has been in the high-tech industry for over 20 years and with FeedRoom since 2007.A serial entrepreneur, he co-founded companies like Open Text.

FeedRoom has raised approximately $66 million to date. They had a Series A in January 2000 from angel investors L.P., Bear Stearns Constellation Ventures, iHatch Ventures, Intel Corporation, New York City Investment Fund, Ridgewood Capital and Telesoft Partners and a $30 million Series Bin August 2000 from Warburg Pincus, Tribune Ventures and NBC as well as the original investors.Two individual investors from their first round, Ken Moelis (head of corporate finance for Donaldson Lufkin & Jenrette) and Rick Salomon (senior associate Rockefeller Family & Associates), also participated in the second round.They raised a $5.4 million Series Cin September 2002from Circle T Partners, a New York City-based hedge fund and previous investors and a $5 million Series D of debt financingin June 2007 from Blue Crest Capital Finance. Their latest round was a $12 million Series E in July 2008,led by Newsprint Capital and previous investors BEV Capital and Velocity Equity Partners. I have been seeing a recurring theme of Hedge Funds participating in venture rounds over the last 18 months. Strange phenomenon!

FeedRoomwas one of the first web video companies to change its business model from simply being a destination to being a white-label video tools provider.Its latest focus has been making video accessible to disabled users.

FeedRoom powers broadband video for ESPN, Cond Nast, The New York Times, New York Magazine and USA Today, to name a few.During the Olympics, FeedRoom saw record traffic across its network, serving more than 11 million streams over six days from the start of the Olympics.

Hoovers estimates their 2007 revenues to be $4.2 million which sounds dramatically low.More concrete and validated revenue figures were not available.According to Quantcast, monthly US traffic is estimated to be822,000 people. Compete estimates unique visitors to be 1.1 million.These numbers are not entirely meaningful for a white label provider, whose audience is primarily on other brands' sites. ESPN, for example, has 7.7 million visitors, and NYT 15.7 million. Some portion of that watches videos at those sites, so conceivably, several million people touch FeedRoom.

According to ComScore data released in April of this year, approximately 71% of US internet users watch online video.The number of US online households watching broadband video has doubled in one year, according to ABI Research.These are all trends in favor of companies like FeedRoom.

Related Readings:
Deal Radar 2008: Fliqz
Deal Radar 2008: Veoh
Viacom's Digital Strategy

By Sramana Mitra