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Video-Sharing Site Metacafe Raises $30M

Metacafe, one of the Internet’s longest-running video-sharing sites, has raised $30 million in third-round funding from two new investors -- Highland Capital Partners and DAG Ventures -- along with existing investors Accel Partners and Benchmark Capital.

The startup, founded in 2003, said it will use the funding to expand the “breadth and depth” of video available on the site.

“This financing underscores the strength of the Metacafe value proposition and bolsters our ability to reach entertainment enthusiasts, video creators, content providers and brand advertisers across the globe,” Metacafe CEO Erick Hachenburg said, in a prepared statement. The company received $15 million last year from Accel and Benchmark Capital.

In addition, Metacafe announced 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 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. YouTube in March 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, in announcing the firm’s investment, said 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., and has offices in Tel Aviv and New York City.