Deal Scoop: $9M for SundaySky to Automatically Create Videos for Online Retailers

If Cisco’s push into the consumer market last week with its in-home telepresence system proved one thing, it’s that video technology is becoming a more immersive part of everyday life.

As such, SundaySky might be aptly poised. The New York-based company, which provides video advertising services for online retailers, is announcing tomorrow that is has raised a $9 million Series B round led by Norwest Venture Partners and including Carmel Ventures and Globespan Capital Partners.

The company previously raised $8 million in early 2009 from Carmel and Globespan and an undisclosed amount of seed funding from angel investors before that.

SundaySky, which was founded in Israel in 2006, provides automatically generated videos for online retailers, such as and Shoebuy, to help sell products and market their brand. Once SundaySky’s platform is plugged into a site, a retailer’s online site has video clips that are automatically created and customized for each product. For example, if a site offers travel services, SundaySky’s software scans the website and can integrate price, product info, travel information and even reviews into a video clip.

In 2009, about 18% of retailers used video technology to sell products online, according to SundaySky CEO President Mitch Praver, citing data from Forrester Research.

“But it 2010, that figure has jumped to 65%, and in 2011 you’re going to see the year of video acceptance as more retailers roll out video,” Praver said to me last week.

VCs have grown increasingly interested in video-related Internet companies. So far this year, they invested about $800 million in 110 such deals, up from $714 million in 104 video-related Internet companies in the same period a year earlier, according to Thomson Reuters (publisher of this blog).

A demo of SundaySky’s technology can be found on its website.

As part of the funding, Dror Nahumi, a partner at Norwest, has joined SundaySky’s board of directors, which also includes Jonathan Seelig, managing director at Globespan, and Avi Zeevi, general partner of Carmel.