BitGravity today said it raised $2.5 million from Allen & Company and individuals including Sling Media co-founder Blake Krikorian, who is joining the company’s board.

Burlingame, Calif.-based BitGravity, which specializes in live and HD content delivery, is quite vague about how everything works, offering hints like it eliminates “latent DNS geo-location requests” and “unnecessary routing layers.” “We have infrastructure all over the world, but not as much as Akamai,” said CEO Perry Wu. But I will say that in my experience, the technology does work beautifully, delivering a highly responsive and high-quality video stream.

The company provided live-streaming services for our NTV Screenings event last week as a trial (so some disclosure is necessary, yes, but it also gave us a chance to say whether the stuff actually works). The setup was a bit more intensive than other things we’ve used in the past — requiring us to buy a Mac Mini to run a Linux-based encoder — but the quality was excellent.

If the amount of funding seems small, that’s by design; the company was founded in 2006 by Wu, a former venture capitalist who thinks you should prove you have a business before taking other people’s money. BitGravity has a strategic partnership with Tata Communications and also powers Tom Green’s (embedded above) and Revision3’s video delivery and Pump Audio’s music delivery. Wu said the company reinvests all the money it makes.

Whether or not you own your own infrastructure or play the field, the content delivery business is a crowded and competitive one. BitGravity’s lean operations may pay off, but the startup could also run into trouble competing with the well-resourced giants in the space like Akamai or the well-funded startups like Move Networks.