The Oregonian: Elemental Technologies wins backing from Steamboat Ventures, Disney’s VC arm
Portland startup Elemental Technologies is getting fitted for a pair of mouse ears.
The video processing company plans to announce details today of $7.5 million in venture backing led by Steamboat Ventures, the venture capital arm of The Walt Disney Co.
The new arrangement represents ongoing evolution at Elemental, which has expanded beyond the video editing software it introduced two years ago to focus on powerful online tools for broadcasters.
In the process, the company has built relationships with chipmaker Nvidia and with major content providers, including Disney and its subsidiary ABC.
“What hasn’t changed over the years is the core video technology,” said Sam Blackman, Elemental’s co-founder and chief executive.
Elemental taps a particular kind of computer chip, known as a graphics processing unit, that serves as a companion to computers’ core microprocessor. The GPU brings extra horsepower for intensive tasks, such as rendering video.
Elemental’s software aims to make video processing more efficient without sacrificing picture quality. That keeps the process speedy and gets the most out of the computers producing the video.
It also gives online broadcasters flexibility, enabling them to adjust video quality on the fly to suit each user’s device and Internet connection. Someone watching at home with fast Internet access can view a high-definition version, for example, while broadcasters can simultaneously stream in lower resolution for viewers on slower connections or a mobile device.
Elemental’s new backing, first disclosed in a regulatory filing last month, is the latest in a series of venture successes for Oregon entrepreneurs.
The state’s startups raised $106 million through the first six months of 2010 — the strongest start to a year since 2007. Last week, Portland-based Puppet Labs and Jive Software, formerly headquartered here, each announced backing from prominent Silicon Valley firms.
Startups seek venture capital to propel their growth, using the infusion of cash to help define or dominate an emerging market. In Elemental’s case, though, Blackman said today’s funding will go in the bank.
The company has spent just half of the $5.5 million in venture money it raised two years ago, he said, and will manage its new investment with similar care.
Product: Video processing to adapt live video for online transmission.
Employees: 30, including 27 in Elemental’s downtown Portland headquarters.
Funding history: Elemental has now raised $14.6 million altogether, including today’s round led by Steamboat Ventures, who were joined by prior investors General Catalyst and Voyager Capital.
Though Elemental is four years old, its business and technology are still in their infancy. Prospective customers from big TV networks and modest Web sites are putting Elemental’s software through an intensive evaluation phase to determine how well it suits myriad video systems.
“The market is here now. We have to execute on our evaluations,” Blackman said. “We have to make sure our customers are happy, make sure our software works for them.”
Broadcasters can’t afford to have a technical problem knock a program offline, and that makes them conservative about their partnerships, according to Blackman. A strong balance sheet — and a relationship with Disney — helps open doors.
“What we put forth is the opportunity to work with The Walt Disney Co. and its many and diverse business units,” said Scott Hilleboe, a Steamboat managing director in Burbank and new member of Elemental’s board.
“At the same time,” he said, “there’s no guarantee of that.”
While Steamboat can make introductions, Hilleboe said Elemental’s technology has to stand on its own. Disney doesn’t demand exclusivity from the companies Steamboat funds, he said, but Steamboat doesn’t guarantee any business from Disney or its affiliates.
Though Elemental’s technology still has to provide itself with customers, Hilleboe said Steamboat believes the Portland company is addressing a unique issue in online video. He said the firm has had its eye on Elemental for more than two years, looking for a company that can help build out that ecosystem.
This is one of several investments Steamboat has made in the field, anticipating a rapid change in how people watch TV and movies. By funding Elemental now, he said, the company will have the resources to immediately meet the demand that will come if its technology proves out.
“When we have been battle tested,” he said. “then we want to be smart about when we add fuel to the fire.”
— Mike Rogoway; twitter: @rogowayRead More...