VC-Backed Bust: Veoh Networks

Last summer, I was chatting with a venture capitalist during a tech conference, when Veoh Networks founder Dmitry Shapiro walked by. “Dead company walking,” the VC whsipered.

Seems he was onto something, as Peter Kafka is reporting that Veoh laid off its workforce yesterday and is expected to file for Chapter 7 bankruptcy protection. This comes less than a year after the San Diego-based online video company cut around one-third of its workforce and installed founder shapiro as CEO, but also less than a year after Veoh beat back a copyright infringement lawsuit brought by Universal Music Company.

At the time, Veoh board member Todd Dagres tweeted about how David had slayed Goliath. Now it looks like they’re both dead (although not really, since Universal is still chugging along).

Veoh had raised around $67.5 million in VC funding, including a $30 million Series D round in June 2008. Backers included Shelter Capital Partners, Spark Capital (which no longer lists Veoh as a portfolio company on its website), Goldman Sachs, Adobe Systems Intel Capital and Time Warner Investments. Kafka reports that Veoh had been seeking new funding, but was unable to get new or existing investors to pony up.

On a personal note, I’m actually sad to see Veoh go. Not because I know the folks over there (although any layoffs are distressing), but because it was one of the only online video sites that permitted longer-form videos. When I wanted to post a 22-minute clip of my Inca Trail trek last year, I used Veoh. Worked great, but now I’m going to figure out where I saved the original file…

Update: Shapiro discusses the situation on his blog

Update II: Dagres has a new Tweet, suggesting that the Universal lawsuit mortally wounded Veoh.