Live streaming video service Ustream.tv Inc. has
announced a new $11.1 million Series A round of funding from investors led by DCM, temporarily quieting
rumors that Microsoft Corp. was nearing a $50 million deal to acquire the startup. Existing stakeholders including Labrador Ventures and The Band of Angels also participated in the new round, while early stakeholders Western Technology Investors and Infinity Venture Partners Incubator Fund of Japan did not join in. Founded in 2003 and launched last year, Ustream had previously raised $2.2 million in angel funding.
Founding chairman John Ham declined to discuss the acquisition rumor, but said DCM's experiences with content distributor BitTorrent Inc. and video "placeshifting" service Sling Media Inc. were factors in choosing to work with the firm. "Sling Media faced a lot of issues similar to what we deal with," he says.
Since launching, Ustream has provided live streaming video services for music shows, political rallies and Digg's
Townhall meeting, among other events. Consumers can use its service to send videos to social networks, blogs and microblogging services. Ham says the company will ultimately target consumers and is currently focused on building a brand name, although it may also pursue sponsored content, premium services, and either pay-per-view or subscription revenue models.
Ustream's announcement arrives on the same day that rival service Qik Inc. raised $3 million from individual investors including Salesforce.com Inc. founder Marc Benioff, Telesoft Partners founder Arjun Gupta and Jingle Networks Inc. chief executive George Garrick.
-- Paul Bonanos
See press release from Ustream.tv
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