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Cloud Encoding Startup Encoding.com Gets Strategic Investment From Harmonic

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Cloud encoding startup Encoding.com has gotten some validation from one of the big players in the more traditional video processing world. That’s because Harmonic has made a strategic investment in Encoding.com, which could lead to closer integration between the companies as more video processing moves to the cloud.

Encoding.com has been around since 2008, long before anyone really wanted to do their video processing in the cloud. President Jeff Malkin recalls flying in to meet the CTO of a “major media company based in New York” and being told that the company would never use its service.

“Thanks, but we could have done this over the phone,” Malkin recalls thinking. Still, over time Encoding.com ended up winning over that company as a customer, along with some other New York-based media companies and online video distributors, like AOL* for instance.

Anyway, the company is being helped by what many organizations recognize as a need to “move all things to the cloud,” including things that they would normally save for their own internal operations like encoding. And Harmonic, which makes video processing equipment that is usually installed on-premise, recognizes the transition as well — which explains why it made the investment.

Harmonic led the $3.5 million Series B round in Encoding.com, which included participation from the company’s existing investors. That brings total investment in the company to $8 million, with other backers including Metamorphic Ventures and Zelkova Ventures.

So it’s not a huge amount of money, especially considering the size of the overall video processing market. Then again, Encoding.com has always run pretty lean, and Malkin says the company has been careful not to raise too much capital over the years.

What’s more important is the strategic nature of the relationship, as it opens up opportunities for Encoding.com to more closely work with Harmonic’s product portfolio and introduce its cloud video processing offering to new customers.

Malkin mentions the possibility of creating SaaS version of Harmonic products in an effort to provide more hybrid on-premise and cloud solutions to media companies. As part of the deal, Harmonic’s sales force will also begin offering Encoding.com’s services alongside its own products, which could drastically increase its sales reach.

In general, the cloud encoding startup is looking to ramp up its sales and engineering teams with the new funding. According to Malkin, the company currently has a headcount of 50 and expects to double that over the next year. A large part of its investment will be focused on expanding internationally, he said.

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* I had no idea TechCrunch’s parent company AOL was an Encoding.com customer before today, btw.