DailyMotion raises €17 million, with French government help

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The French-born version of YouTube, DailyMotion – which has now grown into a global site with 60 million users – has officially confirmed its latest fundraising of €17 million, which was early reported as €15 million earlier this month. The new information is that there was an undisclosed €7.5 million investor in the round which turns out to be a French state-backed investment fund. According to Atlas VC Fred Destin on his blog today, Atlas Venture has participated “above pro-rata in this round and grows ownership”.

DailyMotion continues to defy the destruction of many video players like Veoh in the wake of YouTube’s onslaught, and is now heading through to over 60 million uniques users.

Destin says competition form tradition media plays and YouTube has been “challenging” (an understatement) and he says Atlas has taken flack for it’s backing of the company.

What’s the startegy here? To get to a size where Google/YouTube can’t ignore it in certain markets like France and has to buy it? This seems wishful.

UPDATE: According to LeFigaro, France’s French Strategic Investment Fund has put in €7.5 million and previous investors Advent Venture Partners, AFG Private Equity and Partech International have also participated. The site is serving 1 billion videos viewed a month and is “on the threshold of profitability”.

Our France-based contributor Cedric Giorgi writes:

FSI stands for “Fonds Strategique d’investissement” and is an organism of the French State (49% of shares) intended to invest in strategic companies. It’s the first time the FSI has invested in the digital space. The French State was already represented within the managing Comittee (Info Numerama in French).

The first reactions online are quite sceptical as people fear the French state will try to control and filter what will be made available on Dailymotion.

  • http://free-visit.ne Thierry

    I think it is perhaps that they now have a good short advertisement before many videos (but people can skip it) … so I would say perhaps their global earning are just (finally) growing fast.

    And honestly I have used both dailymotion and youtube to publish small videos in the last 2 years and the conclusion is ….
    that dailymotion just beats youtube in most areas. Especially on the publisher side.

    Hope they just keep growing and make money because they have make good choice up to now.

    I also think youtube is a bit like a public company except it is backed not by a state but by a private company (aja google). Youtube in a way holds back the video market : They just wait to have revenues while other can not. Perhaps this is a bit unfair AND this is why it is very iöportant for competitor like youtube to back huge money.

    But soon as many video-internet-service die, I am pretty sure we will see this market is a huge market ALSO in terms of revenues.

    Dailymotion show them the way, I am with you !

    • http://www.adrocket.com Scott - AdRocket

      I don’t understand this. Unless Compete.com is plain wrong, DailyMotion’s uniques are floundering around the 4.5M mark. Are compete’s numbers not to be trusted? if they accurate, Dailymotion is a pretty average site in the big picture and not growing.

  • nicoburp

    Hope this money, wherever it comes from will be used to IMPROVE the search within Dailymotion, which has always been AWFUL.

    It might be time for Dailymotion to watch the content they are playing regarding to copyright infringement.

    They might have something with HTML5 embed videos, but it’s always good, especially for YouTube to keep improving against challengers.

  • Stephane

    I’m a french entrepreneur and this is a shame… they invest in a dead service and don’t help thousand new projects… so bad…

    • nicoburp

      at least they stopped financing the Minitel :-)

      • http://www.gamecreds.com Tim

        Dailymotion is not a dead service. It works fairly well, their network architecture & facilities are quite impressive, AND they now make money. Enough to somehow reach the breakeven point.

        I don’t see your point. There are plenty of state-owned organizations in France that can help your (OSEO is one of them) start-up.

      • http://www.gamecreds.com Tim

        (sorry, was replying @Stephane)

  • Dave

    as an investor when I read of yet another company whose revenue is driven by “banner advertising and in-video advertising” I switch off. Everyone and their granny are doing this. Also see the slightly controvertial article in Techcrunch March 2009 “Why Advertising Is Failing On The Internet” http://www.techcrunch.com/2009/03/22/why-advertising-is-failing-on-the-internet/

    To summarise: “Online advertising cannot deliver all that is asked of it. It is going to be smaller, not larger, than it is today. It cannot support all the applications and all the content we want on the internet.”

    I hope the VC’s get their money back since clearly they know something I don’t.

    • http://www.freddestin.com Fred Destin

      Advertisers want large and well segmented audiences that fit their target profile. There is a precedent for this called free-to-air TV :-)

      Because the infrastructure costs are much lower, companies like YouTube or DailyMotion can make themselves sustainable long-term even with degraded ad economics. YouTube has had the benefit of not needing to care about generating revenues for a long time.

      There is absolutely nothing innovative in the monetization model except for the definition of user-acceptable advertising formats.

      DailyMotion is Europe’s largest digital media asset. I don’t know yet where we will end up long-term, but that is quite an achievement. Bigger than Orange, Deutsche Telekom or Terra.

      • Neilich

        er Fred….quite a few bigger European “digital media asstes” (i.e. websites) than DailyMotion.

        ah…the French…gotta love em))

    • http://www.mobilityvalley.com Eric

      Hi Dave,

      I’am an entrepeneur who started a company in Paris this year. I sell services (my cash cow) and plan to grow by launching 2 “niched” fee based web plateform.

      If interested just get in touch with me (I speak fluently 4 languages for information). My website :www.mobilityvalley.com (in french but plan to propose multilinguage this month) and my mail eric.granger (@) mobilityvalley.com.

      Best regards

  • figo

    FSI is 100% State owned and not 49% (it is 49% directely owned by the French State and 51% by CDC which is 100% State owned even though the governance of CDC is quite complex)

  • http://www.hummba.com Mark (www.hummba.com)

    Interesting that if you dont have an account with them, you can use a Facebook login, BUT, they expect you to use the same login details from your Facebook account, meaning that they would have your facebook password. Nice little database to have!!!

    • Blog Observer

      This comment fails at promoting your link but just proves you’re stupid when it comes to understanding how web applications work.

      • http://www.hummba.com Mark (www.hummba.com)

        Firstly, my comments on a number of different websites and blogs have my address attached, secondly, I dont think stupid, maybe just miss informed. I didnt realise that you had to be a PHD to comment. In future, I’ll forwward all of my comments to you to vet, you obviously dont have anything better to do.

      • http://socialnetwork.com/ Jonny P

        He is probably right about your facts Mark, but calling somebody stupid is a bit rich Blog Observer, maybe try and tone your comments down. Sitting behind a PC always seems to make people brave, now you would’nt call your post man stupid would you :)

  • Dude

    Each country will have one major player in the long run and be winner-takes-all. But this is only for the standalone video sites like the bulk of what youtube does.

    For video hosting such as embedded video in third party sites, its not winnter-takes-all. In this once you’ve integrated well with a customers publishing process the switching costs will be quite high, however in the beginning no one video hosting site has an advantage.

    Essentially in these case it comes down to how well the partner video site can help you market your content and what the (monetary) return to you is from that partner.

    Lastly there will always be providers catering to niche markets like education (sclipo) or porn (take your pick)

  • http://diplomeenpoche.fr Romain

    Please also note that Martin Rogard, the new director of Dailymotion France (not sure dailymotion intl is bigger …), was previously working for French Culture Minister. Yes, the one responsible for HADOPI …

  • Xavier JS

    For info, in France, demography is totally unbalanced. There are many more 60y old people than youngsters.

    This story could easily create a buzz here. The president is struggling to reform the French Post The Post is often seen as a very healthy and secure company by the 60ies and totally pointless by the youngsters.

    On the other hand, our youth will totally understand that our governement is “surfing the wave” by betting on Dailymotion. They should invest more that way !

    @Stephane : Sorry for your story. However, the FMI itself is not dedicated to small start-ups. It is for large company who need cash to expand internationally. Try the FMI-Pme which has just been created. It’s another way to operate but it may work for you !

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  • http://www.spirofrog.de CV

    that´s great news for the European tech scene! video content is getting stronger day by day. See http://www.filespots.com and http://www.bendecho.com and others tapping into this growing market

  • Brooklyn Techie

    I can say this without reservation: they have the coolest NYC office I have ever seen. Not too fancy, just right, with the best outdoor space in Manhattan.

    Great job Daily Motion!

  • Ian T

    @Jonny P: In the Uk, today we have no postmen (or ladies) to insult – they’re all on strike (cunningly, they will get paid a bonus when they come back to work to clear the post they didn’t process today) ;-)

  • Jonny P

    Thanks Ian T! Strike, strike, your lucky, in Africa we dont have postmen, as all the mail gets stolen at the Post Head Office :)

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  • http://www.socialnetworkingwatch.com/2009/10/dailymotion-raises-17-million.html Social Networking Watch

    DailyMotion raises €17 million…

    TECH CRUNCH – Oct 22 – The French-born version of YouTube, DailyMotion has confirmed its latest fundraising of €17M. There was an undisclosed €7.5M investor in the round which turns out to be a French state-backed investment fund. DailyMotion is……

  • Aksel

    Good thing ! Cheaper than the bloated France24 and more effective !

  • http://www.metaverse3d.com/2009/10/23/links-for-2009-10-22/ links for 2009-10-22 | Metaverse3d.com

    […] DailyMotion raises €17 million, with French government help […]

  • http://www.ojointernet.com/noticias/dailymotion-confirma-la-inversion-y-rectifica-la-cantidad/ Dailymotion confirma la inversión y rectifica la cantidad

    […] la compañía ha confirmado dicha ronda pero ha hecho una rectificación: la cantidad recibida no han sido 15 millones, sino 17 millones de euros. Según el vicepresidente […]

  • http://nextupinnovation.wordpress.com/2009/10/21/dailymotion-raises-another-e17-million-says-its-vc/ DailyMotion raises another €17 million says its VC « NeXtUp Innovation

    […] raises another €17 million says its VC By nextupinnovation DailyMotion has raised another €17 million, according to Atlas VC Fred Destin on his blog. DailyMotion continues to defy the destruction of […]

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