UK video-on-demand company Video Networks has raised equity financing worth more than $154m (£102m) from investment partnership Digital Explosion, the company announced today (June 29).
Video Networks chief executive and founder Simon Hochhauser said the new funds would be used to expand the company's Homechoice broadband video-on-demand, interactive TV and fast Internet services across London from June 29th and then across the UK. Homechoice was launched late last year in North West London.
Digital Explosion, founded by former Microsoft Corp employees and already a shareholder in Video Networks, joins other investors such as French luxury goods company LVMH, Rothschild Ventures, US investment group GE Equity and SanPaolo Imi of Italy. The latest injection of funds means the total amount of private equity raised by Video Networks since its inception in 1992 has risen to more than $257m (£170m).
"This major equity funding, together with the expansion of BT's ADSL network, allows us to deploy our Homechoice service across London and then progressively across the UK," Hochhauser said in a statement.
He told Screen International: "The funding allows us to move to a new level, from a narrow area with 100,000 homes to one covering the area within the M25 [Greater London] by September. It means that we can acquire the capacity we need and can begin a further-reaching branding and promotional campaign. We are very pleased with the response so far. We have achieved household penetration of 3% without advertising on television. Now we will be able to begin TV advertising. We believe our technology is the most advanced. Now we can deliver."
Hochhauser was undaunted by the failure of rival video-on-demand operators Yes Television and filmgroup to achieve stockmarket flotations. "As we grow further we will need further funding. What the current investment does is keep all three options open. An IPO is a possibility, but we might also tap further private finance or go the debt route."
The move comes after Video Networks recently announced additions to its sports content offering, including coverage of Euro 2000, Wimbledon and Royal Ascot. The Homechoice service gives subscribers access to about 800 films plus TV programming and music videos. It is soon also to expand the number of news feeds it carries.
Patrick Frater also contributed to this article