Online video platform Ooyala has raised $22 million in a financing round led by two Pacific Rim investors, as well as current investors, as it continues to grow its business in Asia. The new money more than doubles the capital Ooyala has raised in the past three-and-a-half years to $42 million.
The CID Group, headquartered in Shanghai, and Tokyo-based ITOCHU Technology Ventures, as well as current investors Sierra Ventures and Rembrandt Venture Partners were central to the round, which was over-subscribed; a second closing is expected in the next 60 days to accommodate additional investor interest, Ooyala said.
Ooyala CEO Jay Fulcher said online video in the APAC region is expanding rapidly and having CID and ITV aboard as investors would help Ooyala grow in the area. CID, which has more than $1 billion under management, is well sourced in the Asian market, Fulcher said, adding that its managing director and founder, David Yang, would be joining Ooyala's board. ITV, meanwhile, is well versed in the Japanese market, and has been watching Ooyala's progress there during the past year.
The new funding has been earmarked for three specific areas, Fulcher said:
- Building out global support capabilities, specifically more field sales and marketing capabilities;
- Continuing to push what it sees as a major differentiator for Ooyala in its engineering work on analytics and monetization. Fulcher said the new infusion would allow it to "double down on a lot of those bets and add even more engineering resources into the company;" and
- Taking advantage of opportunities to play more of a consultative role with some of Ooyala's larger customers.
"We're looking to build professional services capabilities that will allow us to tailor our platform for those bigger businesses that are working with us, but also supply that consultative value to them as well," he said.
Overall, Fulcher said, the underlying financial health of Ooyala was good before the funding round, adding that the company would be profitable had it "decided not to make the aggressive investments that we are," and comparing to the current market situation among OVPs as a "land grab" requiring investment to grow share rapidly.
"We're ahead of schedule when you look at comparative SaaS businesses at this stage. This is an opportunity to go a lot faster... it just allows us to take more market share and build out the business more quickly," Fulcher said. "We felt that at year three, and given the fact that we're now coming up on 600 customers, really getting to profitability at this stage was less important than taking the kind of market share we've been taking every single quarter. It's a trade off; we do expect to be profitable over the course of the next year, and to drive a lot of good bottom line results."y.
Over the past year, Ooyala has nearly doubled its global customer base, signing several hundred new publishers. The company has reported record revenue and margins throughout 2010, with more than 300 percent year-over-year top line growth. Ooyala is expanding into new regions around the world, and just last week announced the appointment of John Treloar, a former Adobe executive, to run its Australia/New Zealand operations. In addition to its headquarters in Silicon Valley, Ooyala now has offices in Los Angeles, New York, London, Paris, Sydney and Guadalajara.
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