Money continues to flow into Internet-video ventures, with Metacafe — one of the Internet's longest-running video-sharing sites — announcing last week it has raised $30 million in third-round funding.
The funding comes from two new investors, Highland Capital Partners and DAG Ventures, along with existing investors Accel Partners and Benchmark Capital. Metacafe, founded in 2003, said it will use the funding to expand the “breadth and depth” of video available on the site.
The company received $15 million last year from Accel and Benchmark Capital.
Other Web video plays that have pulled in investor dollars recently include the still-unnamed joint venture between NBC Universal and News Corp., in which Providence Equity Partners has reportedly taken a $100 million stake; and Internet TV startup Joost, which in May announced that it has raised $45 million from Viacom, CBS and others.
Metacafe, as part of its funding announcement, said that co-founder and former CEO Arik Czerniak will relinquish day-to-day management duties to “pursue other entrepreneurial endeavors.” He will remain on the board and continue to advise the company.
According to research firm comScore Media Metrix, Metacafe.com had 25.5 million unique viewers in May. While that puts the site among the top Internet video destinations, it's less than half of the undisputed category leader — Google's YouTube.com. In March YouTube had 53.5 million unique viewers, comScore said.
Through Metacafe's Producer Rewards feature, users who upload videos receive $100 once the clip has been viewed 20,000 times and $5 for every 1,000 subsequent views. In April, the firm said 21 contributors had earned more than $5,000 each through the program.
Highland Capital partner Richard de Silva, regarding the firm's investment, said in a statement that what makes Metacafe stand out from the rest of the user-generated pack is that the company is “moving away from simple video sharing and hosting to delivering an exceptional entertainment experience for short-form content.”
With the funding, De Silva and DAG Ventures partner Tom Goodrich will join Metacafe's board. Metacafe is based in Palo Alto, Calif., with offices in Tel Aviv and New York City.
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