Updated Veoh may no longer host popular adult videos, but that hasn’t stopped venture capitalists from backing up the Brink’s truck. peHUB has learned that the San Diego-based company recently raised around $26 million in Series C funding – which gives it more venture capital than any other online video-sharing site has ever raised (including YouTube, pre-GooTube).
Goldman Sachs led the round, with Pete Perrone joining the Veoh board. Existing shareholders Spark Capital and Shelter Capital Partners also returned, and it’s likely that board member Michael Eisner also pumped in a bit more cash via his Torante investment vehicle. Ditto for Time Warner Investments, although it does not have a board member.
No firm word yet on valuation, although I hear it was being marketed with a pre-money valuation of between $60 million and $70 million.
Veoh originally raised a $2.75 million Series A round in mid-2005 led by Shelter Capital, and then scored a $12.5 million Series B deal last summer. So that’s just over $40 million all together, and it dwarfs what Veoh’s competitors have raised. The biggest kid in the pool is YouTube, but it took in just $11.5 million before selling to Google. DailyMotion raised just over $7 million for its Series A last year, while MetaCafe
doesn’t yet have any known institutional funding raised a $15 million Series B round last year from Accel Partners and Benchmark Capital.
On the other hand, Veoh still lags all three of those other sites in web traffic – according to unreliable Alexa — although has made up serious ground in the past few months. It aso handily beats Revver, which raised around $16 million…
One nagging problem could be continuing resentment over Veoh’s past proclivity for running copyrighted material, although it ended that practice nearly a year ago (thus deleting most of its racy content). On the other hand, Veoh does have a few legit advantages over YouTube. The most important may be that it can host much larger files (as can DailyMotion) — which is a particular boon for independent film producers. It also changed up its gameplan to compete more with companies like Joost (and Brightcove, to a lesser extent), with a high-def desktop player. Finally, Veoh recently launched a “Pro” product, which lets video producers make money by either: (A) Charge a fee per video view, or (B) A video-specific ad-share program.
Todd Dagres of Spark Capital declined to comment, and I’ve not heard back from Shelter’s Art Bilger, Perrone or Veoh CEO Dmitry Shapiro.