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Valleywag
Maybe the world has not gone entirely mad for online video. Brightcove, a version of Youtube for big online publishers, is rumored to be having trouble with its giant $55m funding round. Time Warner's AOL and Barry Diller's IAC, two lead investors from Brightcove's earlier funding round, are thought unlikely to participate. This is second-hand information, so treat with caution. But, if true, difficulties for Brightcove would dampen some of the enthusiasm for online video since Youtube sold to Google.
The Massachusetts online video service, founded by Jeremy Allaire, will probably still be able to raise money from some of the cash-rich hedge funds that are invading venture finance. Brightcove is telling other investors: these hedge funds will provide a basis of solid institutional ownership ahead of a possible public offering of Brightcove stock. Which would be laughable: hedge funds are notoriously fickle investors, and liable to dump shares on a public market.
It's likely that AOL and IAC are balking at the price of the Brightcove deal. The company is raising money at a pre-money valuation of about $150m, an ambitious price for a venture which has neither profitability nor the massive popularity that led Youtube to sell for $1.65bn. Brightcove provides online video services to sites such as Marvel Entertainment's, and the National Lampoon. But its services are extremely complicated; each deal is likely to require a lot of high-cost persuasion, and then hand-holding.
More on Brightcove to come. Any other angle on the deal? And anyone out there who's actually tried to run an online video site with Allaire's application?
