Elemental Technologies today said it raised $13 million in a Series C funding round led by Norwest Venture Partners, joined by existing investors General Catalyst, Voyager Capital and Steamboat Ventures.
CEO Sam Blackman told FierceIPTV the new funding would help the company accelerate its plans to expand in the market, continue hiring and raise awareness about its product.
Blackman said the involvement of Norwest--which has backed other high tech companies like Rackspace, Polycom, Omneon and others--was significant in part because Elemental wasn't actively seeking funding.
"It wasn't us going out to raise money," Blackman said. "It was very strong, proactive interest on their part. They came to us and said ‘Hey, guys, we think we can help you scale.' That means a lot to us." The company raised $14.6 million in two previous rounds.
Blackman said having extra cash, its balance sheet now shows reserves of some $19 million, would allow the Portland, Ore.-based transcoding company to more easily expand its international efforts. Elemental already has offices in the United Kingdom and Hong Kong, and Blackman said the company plans to get feet on the ground in Latin America, and to expand in Europe, Asia, Russia and the Middle East.
The company, which Blackman said has been cash-flow neutral for several quarters, has no immediate plans, or need, to deploy the funds.
But, he said, "Having a better balance sheet is better for us because it shows the companies we're approaching that we're in a strong financial position, that we have staying power."
Elemental's customers include Comcast, Disney, Avail-TVN, ESPN, Big Ten Networks, CBS Interactive and HBO. It recently signed several big streaming deals for the 2012 London Olympics.
Blackman said Elemental is working to expand its product line from the origin to the network side of video processing; something the extra cash also could accelerate.
"Today, we process video and hand it off to a delivery network of some type like Akamai (Nasdaq: AKAM)," he said. "We think we can leverage Elemental's video processing experience better, and further down the line."
Blackman also pointed out that the startup in January 2011 added a heavy hitter to its lineup to help it scale and take a bigger role in the market.
Kevin O'Hara, the co-founder and former CEO of Level 3 Communications (NYSE: LVLT), joined the board shortly after taking over as CEO of Integra Telecom. He has some 25 years of experience in guiding startups.
"We're excited he's willing to step into this role," Blackman said. "Elemental is truly humbled to have the strong support of NVP and our new chairman as we continue to invest in the product development, sales and support required to build a world-class business."
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