Dailymotion, Europe’s biggest online video challenger to YouTube, on Thursday said it had raised $25m in a new funding round led by the French Sovereign Fund (FSI). The French strategic investments fund, which is 49 per cent owned by the government, contributed $11m to the round, with all the existing investors, Advent Venture Partners, AGF PE, Partech International and Atlas Ventures, taking part.
Dailymotion chief executive Cedric Tournay also said the company had now hit break-even and expected to make a profit next year. The site now attracts around 60m unique users each month, up from 35m a year ago. Although it is dwarfed by YouTube, it is doing well to survive and grow in a market where competitors like Joost and Veoh have had to retreat.
It is especially amazing given the company’s recent revolving door of CEOs – it has had three this year. Mark Zaleski resigned from the post suddenly in April, Ian Brotherston took the role on an interim basis and the company is now hoping for stability under Mr Tournay.
Fred Destin at Atlas Ventures, one of Dailymotion’s early investors, said the market was still tough for online video sites, but believes Dailymotion is a sustainable business.
“We won’t beat YouTube on inventory, but we can do better on things like the customer experience, the editing,” he said. Dailymotion tries to differentiate by making its site more “fun” and “irreverent” and offering programs such as Motionmaker, to help would-be film-makers promote their work.
Mr Destin said the market for online video had gone from around 165 registered companies several years ago, to now a handful of sizeable competitors, including YouTube, Hulu, Metacafe and Dailymotion. There is a new challenge, however, from telecoms operators such as Orange, Deutsche Telekom and Terra Networks, which are offering their own online video services.
The new funding will help Dailymotion accelerate its own investment into delivering video to mobile phones and IPTV, in order to counter these new threats.
