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Last updated: May 10, 2007 4:57 pm
Joost, the online video site established by the founders of Skype, has raised $45m in funding from four venture capital and media groups, just a week after launching the service.
Sequioa Capital, which backed Yahoo, Google and YouTube; Index Ventures, an early investor in Skype; Li Ka-shing, the Hong Kong tycoon; and CBS, the US media group, have all taken “small minority” stakes in the start-up.
Viacom is also understood to be among the partners, although the nature of its backing has not been disclosed.
Janus Friis, co-founder of Joost with Niklas Zennstrom, told the Financial Times the investment would help Joost expand to attract “tens of millions, even hundreds of millions” of viewers.
“We’ve got the product out there. Now it’s all about accelerating and expanding the business,” he said. “This funding round is all about accelerating everything.”
Until now, Joost has been funded personally by its founders, who invested part of their proceeds from selling Skype to Ebay for $2.6bn in 2005. By the time of last week’s launch, it had signed up “a few hundred thousand” people to test a beta version of the service, which was originally codenamed the Venice Project.
“The premise and the promise of Joost are very intriguing,” said Roelof Botha, general partner at Sequoia. “It is rare to come across a business that has the potential to transform an industry in quite the way Joost has.”
In contrast to other online video sites such as YouTube and DailyMotion, Joost is focusing on professional content, displayed in high definition on a full-screen platform which users download, rather than watching in a browser window.
At launch, Joost had secured programming from CBS, Sony, Turner and Warner Brothers, as well as sports coverage of the National Hockey League and Indy car racing. The free-to-view service is funded by advertising from Coca-Cola, Nike and others.
Mr Friis said such partnerships had made it much easier to persuade other content suppliers to work with Joost.
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