After more than three years and a name change, a former head of video, new platforms and TV at Fairfax Media, Ricky Sutton, has closed a $3.8 million raise led by CapitalPitch and Cygnet Capital for video distribution start-up Oovvuu.
The company was founded by Sutton, alongside Greg Moore and Ross McCreath, after he had developed online TV platforms for The Age and The Sydney Morning Herald in 2011, and been approached by broadcasters keen to add something similar to their websites.
News Corp, became its first customers, with its software meaning the documentary-style videos were embedded directly into news articles on relevant topics.
This company developed a machine learning-powered platform called Compass to match and place video content from broadcasters such as the BBC and ABC into news articles, without editors having to spend time finding and pairing the content. The company’s revenue is generated from advertising played during the free videos.
Oovvuu has since scored deals with 78 broadcasters including Bloomberg, BBC, Thomson Reuters, the SBS and Al Jazeera and is in the process of deploying the video distribution software with publishers such as the Indian Express the West Australian and South Africa’s News24.com.
The capital raise is a significant milestone for Oovvuu, not least because its founders have forsaken salaries for the past four years and funded the start-up off their own backs.
“We spent three years and did 500 pitches from Singapore to New York, to Silicon Valley to South Africa. We were told to copy Netflix, we were told to copy YouTube and we were told we were too old-school and they’d never back a company wanting to help traditional media.
“But my advice is don’t rush, don’t take the first offer, it’s painful … but we’ve ended up where we are.”
The investment in Oovvuu is the first to be publicly announced by $10 million-plus fund and investment platform CapitalPitch, which has the backing of the high-net-worth Maloney family through the Tulla Group. But it is believed to have also closed two other deals this year.
The round was also led by Cygnet Capital, a boutique investment banking group led by Darien Jagger and Jonathan Rosham.
“Over our years of investing in early-stage companies prior to assisting them to list on the ASX, we’ve become keenly aware of the funding gap many emerging companies encounter just as they’re seeing opportunities to rapidly scale their operations and create serious growth,” Jagger said.
Oovvuu’s Compass also got the attention of global tech giant IBM, which approached the business when it first created the machine learning platform and provided the start-up with access to its cognitive computer Watson. Compass is now able to match 1000 videos to relevant news articles in less than a second.
Sutton said the company’s unusual name came about after a joke from a friend in Silicon Valley about crazy start-up names.
“At first we had the name Contenco, we thought it would appeal to traditional media companies, but when we got to the investment community they said we were too traditional, not Silicon Valley, not funky enough and they wouldn’t fund us,” he said.
“I rang a friend who is a successful Silicon Valley entrepreneur he laughed and said to change it to something with two Os, saying Facebook, Google, etc all had two Os. It was almost a joke but he was right, we changed the name and using the same pitch every investor offered us money.”
He said the ultimate commercial objective of Oovvuu is to take back $20 billion in advertising revenue from Facebook and Google and return it to traditional publishers, helping to bring about a new golden age of journalism.
“They’re big, but not infallible. If you believe the future of media will be video-led and that quality journalism is important, you have a responsibility to do something about it.”