Cinemacraft, a Tokyo-headquartered startup that provides an alternative to the traditional video embed for publishers and content creators, has closed a $3.9 million Series A round to expand its focus on international markets and product development.
Existing investor 500 Startups led the round, which included participation from previous backers NTT DoCoMo Ventures, Samsung Ventures, and Turner Broadcasting’s Media Camp. New investor Fierce Capital, the VC firm from model and celebrity Tyra Banks, also took part. The startup raised previously $1.5 million in September 2013, and an earlier $500,000 seed round.
Cinemacraft provides ‘dynamic’ embeds — know as videograms — which display a selection of segments from a video rather than a single frame as is standard. Clicking on any one segment lets a viewer to skip to that part of the video, an approach that — Cinemacraft claims — can drastically increase user engagement and interaction.
In the past, the company was focused on appealing to all kinds of users, via embeds and consumer-facing apps, but Cinemacraft CEO Sandeep Casi told TechCrunch in an interview that it has “found its product-market fit” as a B2B2C company with three distinct offerings.
The startup’s tech can be used by publishers as a social media embed — typically a Twitter card or Facebook post — a web-based embed — appearing on websites or blogs, such as TechCrunch — and, finally, as a format for ad servers.
Casi said that, in the final example, videograms are a method for placing video content in skyscrapper ads, banner ad spots, and even via Adsense slots. That’s advantageous for advertisers and publishers alike because it could turn dull ad space restricted to basic text and media into more interactive (and thus lucrative) opportunities.
He said that videograms generate increased engagement as embeds, typically seeing a 40-60 percent click-through rate as opposed to the 25-40 percent average based on a single-frame preview. Equally, with a comment function like that of Soundcloud, it also allows viewers to provide feedback in a central place and in response to each frame of the video footage.
Cinemacraft uses HTML5 and doesn’t impact any element of a publisher’s content, that’s to say that clips retain existing DRM, any in-roll advertising, etc. Paying publishers — charged $1 per CPM (for 1,000 views) — can monetize videograms themselves via a self-serve dashboard. Those using the technology for free will have a video ad placed inside the content by Cinemacraft, revenue from which is shared with the content maker directly.
Cinemacraft opened an office in Mumbai, India, with four developers recently, although its two-person development team in Tokyo is where its core engineering takes place. Its technology is open to customers in all markets, but it works via ad and talent agencies in the U.S. where — alongside Japan, Korea and India — it sees highest demand. It is likely to adopt a similar agency-based approach to scale in other markets where it sees rising demand, such as Europe and Latin America.
Casi said that the company has seen a lot of success among the film industry, with its technology proving particularly popular with Bollywood content makers in India.
While it keeps its team streamlined, with just a total of eight staff, Casi beefed up the executive team with the hire of Sherwin Faden, formerly president of TapJoy Japan, as Cinemacraft’s new COO. An additional two new developers will join in the coming months too, Casi said.
“We went for a manageable new funding raise now because we’re making revenue and want to see how the business will develop this year,” Casi said of the timing of its Series A round. “If we see hyper-growth, then we may look to raise a Series B before the end of 2015.”