Transformation of Raw Technology into Industry Market Leader Position
Digitalsmiths delivers sophisticated video search and personalized recommendations for all types of video content, including TV, film, and live events, across multiple media channels and devices. Digitalsmiths’s MetaFrame product enables content owners to create and manage frame-by-frame data that goes beyond the basic tags of title, actor, and genre, thereby creating additional value and monetization opportunities for video content. The company’s Seamless Discovery platform, launched in November 2011, allows service providers, connected device manufacturers, and content owners to provide customers with a more relevant and personalized viewing experience.
INVESTMENT STRATEGY FIT:
Chrysalis’s technology team seeks businesses that make information more productive and efficient. Digitalsmiths’s technology disrupts the traditional media delivery model, making content more accessible and relevant to a viewer population that has become increasingly dissatisfied with current video search options. Digitalsmiths’s data-driven technology more efficiently organizes content so users become more engaged with relevant content, resulting in increased viewership and subsequent monetization opportunities for media stakeholders.
Chrysalis was introduced to Digitalsmiths’s CEO, Ben Weinberger, at an angel investor conference by one of North Carolina’s top start-up law firms. At that time, the company was seeking to relocate its operations from Beaufort to Raleigh-Durham to expand both capital and talent options.
Chrysalis understood Digitalsmiths’s value to a consumer base with endless entertainment options but no efficient means to find relevant content. As such, we provided the company with its first institutional capital round, partnering with the Aurora Fund for the company’s Series A financing. This financing round allowed the company to relocate to the RTP area and begin attracting top talent to further build-out its product.
After early adoption by key media customers, Chrysalis continued its support of the company via participation in the company’s Series B financing in 2008 and Series C financing in 2011. These financing rounds allowed the company to accelerate product development initiatives, make a strategic acquisition, and increase its sales and marketing initiatives to best position the company in an increasingly hot segment.
In addition to financial support, Chrysalis has used its network and industry contacts to provide guidance and advice to the company’s young management team. In 2009, Chrysalis introduced the company’s CEO to a Chrysalis LP and long-time colleague with deep industry experience. After consulting with the CEO for several months, Chrysalis’s LP became Chairman of the company’s board of directors. Additionally, Chrysalis has played an active role in recruiting other top talent to the company and remains head of the Board of Directors strategic sub-committee, a group that actively seeks advice from industry experts and acts as a sounding board for the company’s management team.
As a result, Digitalsmiths became the leader in next-generation video search and recommendation technology. The company’s technology is used by top-tier studios, broadcasters, television distributors and online publishers to distribute specific content through enhanced search and recommendation, resulting in increased consumption and an enhances customer experience. Its customer list includes seven of the top ten pay TV operators in the U.S.
In February 2014 Digitalsmiths was acquired by TiVo for $135 million, resulting in a profitable return to all stakeholders including Chrysalis. In a world where consumers have the choice of watching video on cable, pay TV, Netflix, Apple TV, Amazon Instant Video, Hulu, Roku, and more, TiVo is making Digitalsmiths a central part of its strategy to allow consumers to “find anything, anywhere and watch it anywhere”. Digitalsmiths’ cloud-based technology platform and search capabilities accelerate TiVo’s evolution to a device-independent software-as-a-service offering, reflecting the fundamental disruption of many industries as “software eats the world”.