DivX video compression creators DivXNetworks Inc. has closed a $7 million round of financing, the company announced May 5.
That round was led by Zone Ventures and included both new and existing investors WI Harper Group, Draper Atlantic, Wasatch Venture Fund, Springboard-Harper, Tim Draper, Cardinal Venture Capital, ALi Corp., and Cyberlink International Technology Corp. (B.V.I.). DivXNetworks will use the funds to bolster its position in the digital video space through increased marketing, sales, engineering, and support efforts.
"We've had strong support from a great group of investors since the inception of the company," said DivX president Shahi Ghanem, announcing the financing closing. "This has been a key driver in our success, and we're pleased to continue the tradition with a round that includes a mix of strategic investors combined with new and existing venture capital. Our consumer electronics, software licensing and video-on-demand business units are growing at an incredible rate thanks to the international popularity of our technology and the DivX brand name. This new round of funding will allow us to maintain our leadership position and to maximize shareholder value by intelligently managing expansion while capitalizing on key market opportunities."
DivX's video technologies lay claim to over 120 million PC and consumer electronics installations worldwide. The DivX technology suite is powered by the DivX codec, a compression technology that enables DVD-quality video at 1/10th the original file size, along with a full video-on-demand distribution system featuring proprietary security and digital rights management technology. DivXNetworks licenses its technology and brand name to leading consumer electronics, application software, and content distribution companies. The company's DivX Certification program, designed to enable consumers to playback DivX files on numerous types of consumer electronics devices, will drive to market over 20 million DivX Certified products in 2004, including devices from manufacturers such as Philips, JVC, Samsung, Plextor and more.
"DivXNetworks has an excellent team that has built a profitable, thriving, world-wide business around a great technology and a strong brand," added Zone Ventures managing director Frank Creer. "DivX is leading the way in driving IP video to the T.V. through next-generation consumer electronics devices. The success of the DivX Certification program and the company's high-profile partnerships with leading consumer electronics and software companies reinforce this position in the marketplace."
"DivXNetworks has a complete and expansive strategy covering everything from PC-based video creation to TV playback on leading consumer electronics devices. The company's early international success, particularly through our assistance in Greater China, enables it to tap into an unlimited potential market for DivX technology, profoundly changing the way consumers create, watch and distribute video content," said WI Harper Group chairman Peter Liu at the closing. "The company has a strong management team in place and an intelligent expansion strategy to address the needs of the global marketplace in the years to come."
