Early Skype backers rev for Revver
What's the lure? Perhaps the opportunity to generate hefty advertising revenue from P2P networks.
Skype, also a P2P enabler, became the VC feel-good story of the year when eBay purchased it in September in a deal that could be worth up to $4.1 billion if certain benchmarks are met.
Bessemer Venture Partners and Draper Richards were original investors in Skype. Draper Fisher Jurvetson participated in a second fundraising round for the company. The firms have teamed again to back Revver, which has developed a technology platform that helps the producers of amateur digital videos share the content online and also generate revenue from their efforts.
So what's the connection?
Perhaps the opportunity to generate hefty advertising revenue from P2P networks, whose potential is untapped.
"The explosion of self-published, popular-content downloaded via e-mails from friends and colleagues, instant messages, or discovered on various Web sites or P2P networks, presents a massive market opportunity," Steven Starr, Revver founder and CEO, said in a press release.
"It's the hope of a whole wave of new investments that VCs are making these days," says Andreas Stavropoulos, a managing director with Draper Fisher Jurvetson, trying to deal with navigating, collecting, aggregating and monetizing self-published content.
Self-publishing technologies such as Web logs and wikis are advancing the online marketplace to a more Web-services-oriented environment--an area VCs will continue to scrutinize for the next several years, Stavropoulos says, because managing self-published content is difficult.
As self-publishing, P2P networks and online file-sharing and distribution grow, costs decline proportionally, so feeding an advertising market and creating revenue from shared content is a focus for start-ups today.
Many business plans landing on his desk, Stavropoulos says, address the "Web 2.0 way of doing things" and its impact on traditional Web business models.
Founded in 2004, Beverly Hills, Calif.-based Revver has developed a video-sharing system that allows users to tap into self-published content for free but links video producers with advertising revenue. With its proprietary tagging technology, Revver facilitates and tracks the distribution of videos, in which sponsors pay to advertise.
Revver will use the money for internal growth, research and development, and sales and marketing initiatives.
Revver is the most recent example of P2P networks receiving VC support.
BitTorrent, a San Francisco start-up that manages Web traffic and cooperative file distribution, raised $9 million from Menlo Park, Calif.'s DCM-Doll Capital Management in late September. Meanwhile, Vivox, a Wayland, Mass., VoIP (voice over Internet Protocol) provider raised $6 million from Canaan Partners of Menlo Park and Grand Banks Capital of Newton, Mass., earlier that month.
Skype is the most impressive exit for a self-publishing and P2P network but not the only example. Internet domain provider VeriSign grabbed technologies that fit within purchased aggregate news provider Moreover Technologies in October for $30 million. Moreover, it received venture funding from Atlas Venture, Reuters Venture Capital and Dawntreader Ventures.
VeriSign also acquired Weblogs.com for $2.3 million earlier in the month.
It seems all exits in self-publishing won't be like Skype's sale to eBay, but, Stavropoulos says, "I would like to think Revver has even greater potential."
Board seats will go to Bessemer general partner Rob Stavis and Draper Richards partner Howard Hartenbaum. Both VCs sat on Skype's original board.
Fenwick & West LLP advised Revver.
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