Telstra leads $35 million round in Silicon Valley start-up Ooyala

Telecommunications giant Telstra has led a $35 million Series E round in Silicon Valley start-up Ooyala, but is remaining tight-lipped about its plans to invest in any Australian companies.

Ooyala, which describes itself as “the leader in online video management, publishing, analytics and monetisation”, announced it has raised $35 million in new capital.

According to the company, the money will be used to standardise digital video experiences, provided by multiservice operators and TV programmers on the Ooyala platform.

Ooyala was founded in 2007 by brothers Bismarck Lepe and Belsasar Lepe, and their friend and colleague from Google, Sean Knapp.

The Series E investment round was led by Telstra Applications and Ventures Group, a subsidiary of Telstra founded last year by chief executive David Thodey.

Headed up by Deena Shiff, this division looks for early stage investments in small companies. The deal with Ooyala represents the division’s first investment.

Telstra and Ooyala are currently working on a commercial agreement.

Once finalised, Telstra will become a major Ooyala customer and reseller, deploying Ooyala software, analytics and service offerings throughout Australia.

Telstra will work with content owners to transition from traditional video delivery to IP-based distribution.

According to Ooyala, Telstra’s current multi-device offerings will be enhanced through the integration of Ooyala’s online video technology and analytics.

Combining Telstra and Ooyala provides an opportunity to take advantage of the strengths of both organisations to better serve the Australian market, it said.

Ooyala will also use the new capital to fuel its market momentum with MSOs and TV programmers.

The company will add scale particularly to its operations outside of the United States, building on its existing footprint in Europe, Asia, Australia and Latin America.

“The lines between online video and TV are blurring. Ooyala has been the driving force the past few years,” Ooyala chief executive Jay Fulcher said in a statement.

Telstra Media’s Gary Traver – now a member of Ooyala’s board of advisors – says the industry is now standardising around technology stacks that “enable the future” of IP-based distribution.

“With Ooyala’s robustness and focus on personalisation and profitability, it is becoming the platform on which the next generation of large-scale deployments are built,” he says.

In December last year, Shiff told ZDNet Australia Telstra has set aside $50 million to invest in technologies that align with its commercial and financial efforts.

It’s unknown whether priority will be given to Australian companies.

“Ideally, we’re looking to make investments where they have a proven business model, customers and revenue, and ideally making a profit,” she said.

“Because we’re making investments based on strategic considerations, we’re not limiting ourselves in terms of size. They basically have to meet strategic and financial hurdles.”