The NewsMarket, a provider of free broadcast-standard video over the Internet to news media, has raised $4 million in Series B funding from Apax Partners, Hearst, Boldcap Ventures, and others.
The firm's proprietary video content management platform offers an automated, Web-based channel for global distribution of video files. Journalists can preview and select just the clips they need and download them instantaneously. Clients include Intel, BMW, Yahoo!, Roche, Adidas, and the U.S. government.
Apax, with approximately $12 billion in capital under management, was the lead investor for this round. Existing investors Ascend Ventures, New York Community Investment Company (NYCIC), and Coastal Ventures also contributed to the funding, which will go towards launching more advanced video search and delivery tools for its media users and to accelerate sales and marketing globally. NewsMarket has now raised $10 million in capital to date. As a result of the funding, Patricof and Scott English, Hearst's interactive media division VP, will join NewMarket's board of directors.
The company had multiple terms sheets and were tendered four different offers. The due diligence was lengthy, according to The NewsMarket CEO and co-founder Shoba Purushothaman.
"We took the people who we thought we were going to add strategic benefit," said The NewsMarket CEO and co-founder Shoba Purushothaman. "It's great to have expansion capital, but we were really looking for forge relationships. We're at a stage where we've been revenue generating for three years. We have a strong customer base."
Apax initially approached NewsMarket at the New York New Media Association trade show.
"We had a booth, and someone from Apax saw us and followed up. We weren't actively looking [for funding at that time]. [We were intrigued by] the Apax name and the fact that [co-founder] Alan Patricof was the partner doing the deal," she said.
Hearst became interested in investing in The NewsMarket over the last two or three months, Kenneth Bronfin, Hearst Media Interactive's president, said.
"[Our news process] works better when one of our editors, producers and reporters [can] have this service, preview the materials and can download them. It's like a library at their fingertips. Budgets are not increasing, so it's ideal to have access to more content to build stories from," he said.
The impetus behind Hearst's investment was that The NewsMarket had a unique business proposition.
"We did not identify any significant competitors, for what [The] NewsMarket does, in the space today," Bronfin said.