Written by Liz Gannes
Posted Thursday, August 30, 2007 at 5:07 PM PT

 

Another Huge Video Funding: Dailymotion Gets $34M

Paris-based Dailymotion has raised $34 million in a second venture capital round, the company just told us, confirming a report by The Wall Street Journal’s online edition (behind paywall). The funding comes on the heels of close competitor Metacafe announcing it had secured $30 million less than two weeks ago.

It appears that investors think this will be a war of attrition. Hulu, the new name for “NewCo,” the joint venture between News Corp. (NWS) and NBC, recently raised an astonishing $100 million, and it hasn’t even entered the market yet. We’re somewhat surprised that investors in all three companies think this is a war they can win.

Indeed, the stakes are getting higher and higher for independently operated general audience video sites. Both Dailymotion and Metacafe are fighting market leader YouTube and media and Internet portals around the world. Earlier this summer, comScore noted that the two sites are jockeying for position just outside of the top 10 video sites in the U.S. (where Google, Fox Interactive, and Yahoo sites lead). In April, Dailymotion had 4.7 million unique video streamers in the U.S., while Metacafe had 3.7 million. By contrast, Google sites (including YouTube) had 131.9 million unique video streamers in May (read here for more on comScore’s new video measurements; also note that these numbers are comparing April to May).

The new Dailymotion funding comes from Advent Venture Partners and AGF Private Equity, based in London and Paris, respectively. It appears from the WSJ article that prior investors Atlas Venture and Partech International may not have participated in the round; update: Dailymotion tells us they did participate in the round. The two VC firms had previously put $9.5 million into the company. (Metacafe has raised $45 million in total, if you want to go dollar-for-dollar.)

Around the time YouTube was bought by Google last year, Dailymotion acquired a reputation for being a site that tended to be lenient towards unauthorized uploads. The company has since cracked down on copyright infringement, earlier this summer deploying fingerprinting technology from Audible Magic (this is the same stuff NewTeeVee tested and found lacking). Dailymotion is also diversifying its strategy to include original programming, contests, and licensing Hollywood-style content.

While until recently individual companies enjoyed relatively unchallenged dominance in certain countries, they are now stepping onto each other’s turf, as evidenced, for example, with YouTube going to France and Dailymotion coming to the U.S..

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Topic: Money & Power, Startups

Comments (7)

  • Last year when we funded DailyMotion I think there were about 50 sites with 2M uniques or so. Now the field has narrowed. I really do not think established media companies are really in a good position to replicate viral successes like that of DailyMotion; culturally and technically they are not adept at doing this. This is the world of media (but not as we know it) and YT, whilst clearly the dominant player, is unlikely to replicate the kind of dominance that GoogleSearch and MSN Messenger have achieved in Europe, for example. In the world of the future of broadcasting, there is place for more than one large winner.

    Fred Destin — 12:42 AM on August 31, 2007 Reply

  • Hi Fred, thanks for the comment. Can you help explain why the particular amount of money seemed appropriate to you and the other investors?

    Liz Gannes, NewTeeVee — 12:50 AM on August 31, 2007 Reply

  • There will be room for winners, big and small, in the video space. Imagine if Fox had decided the network TV space was too crowded back in the mid-80s?

    However, I do see a move away from these silos and more towards destinations where i can find, collect, and discover videos from any site with my friends. If fragmentation of the audience has taught us anything, it is that people want to enjoy a wide variety of content from many sources, but don’t want to waste too much time finding it. Of course, I am biased in this view. :)

    Frank Sinton — 1:22 AM on August 31, 2007 Reply

  • The video sharing scene can still grow. I guess that the investors in both companies are aware of the fierce competition, but think that there is room for many.
    Apart from Youtube, there have been acquisitions of much smaller video sharing sites.
    I wonder about the valuation of Dailymotion and Metacafe…

    Yohay — 2:52 AM on August 31, 2007 Reply

  • What’s the business model of Dailymotion? How do they think to give money back?

    I wandering, is that ads? If so, why they still have no ads on their’ website?

    I’m just interesting because it all looks very strange for me. I’m video businessman also.

    Thanks,
    Andrew

    Andrew — 12:31 PM on August 31, 2007 Reply

  • I for one, have to wonder how aggregation sites are going to handle the Google issue. Google is clearly the best at indexing the world’s info and they are looking to do more with video.

    If I can just search for a video in my browser’s google box, why do I need all these other agg sites?

    Brian Andrews — 6:52 PM on August 31, 2007 Reply

  • hi, you may note that the 131.9m refers to the total amount of streamers in the US – Google sites ‘only’ had 64.9m.

    Eva — 9:28 AM on September 11, 2007 Reply

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