Michael Litt, CEO of Kitchener, Ont.-based online video startup Vidyard.Handout
Kitchener, Ont.-based technology startup Vidyard has raised $18-million from a mix of Silicon Valley and Canadian investors to fund the expansion of its video marketing platform.
The series B funding round will be led by Bessemer Venture Partners, with participation from Salesforce Ventures and existing investors SoftTech VC, OMERS Ventures and iNovia Capital. Bessemer partner Byron Deeter will be joining the company's board.
Starting in 2011, the company, which is sometimes described as a YouTube for business, had already raised about $8-million in seed and venture capital.
Vidyard specializes in hosting videos for external marketing or internal corporate communications, allowing companies to eschew public platforms like YouTube or Vimeo.
"Our goal here is to become the category king," says CEO Michael Litt, 28, a graduate of the University of Waterloo. "We set out in 2013 to become the established thought leaders in video marketing."
Vidyard is more than just a platform bucket that earns revenue by sharing advertising dollars with content creators. Its specialty is in providing complex viewer analytics that detail which parts of a video are being watched and for how long, data that can be used to help craft better sales pitches or training guides.
"It appears that Vidyard's really hit a sweetspot here, the numbers have been great so far," said OMERS Ventures managing director Kevin Kimsa. "They are hitting multiple segments – too many to name – with a very, very large market opportunity."
High-profile clients and partners include Salesforce, Marketo, Eloqua, Act-on, MailChimp and Hootsuite.
After a couple years of positive revenue growth and international expansion, Mr. Litt says he plans to build out the content creation side of Vidyard's platform. The first step will be a new system that will let clients upload PowerPoint presentations and then record audio to create a quick and easy video, and eventually adding in some lightweight video editing features for posted videos.
"You want to get it to the point where you can't live without it, that's a big part of their product road map," said Mr. Kimsa.
Mr. Litt envisions the company's true explosive growth will come as the social-mobile marketing revolution takes hold in more traditional businesses that, up until recently, haven't thought they needed direct marketing.
"Look at the gaps we fill in a Salesforce ecosystem. Imagine if we were even going to do one per cent of Salesforce's total revenue," says Mr. Litt. Salesforce is expected to report revenues of about $5.3-billion (U.S.) for 2014.
Mr. Kimsa, who sits on Vidyard's board, said that OMERS is proud to be a "homer" investing in Canadian companies: "It all comes down to trying to ensure that the company has the right type of financing to allow it to reach its potential. That's one of the benefits of OMERS being relatively patient capital."
Vidyard's expansion plans include more manpower. The company went from 30 employees last year to about 60 now, and is renovating a floor in its office space that should expand the capacity to about 150 employees.
The focus will remain on engineers, a task made easier by being away from Silicon Valley's overheated tech scene, Mr. Litt says. "We're hiring Canadians. I spend a tonne of time [in the Valley] but we don't have the retention issues. They suffer from the flavour-of-the-week syndrome."
Free of the stress of having to be the hottest tech idea, he says he can focus on Vidyard's next chapter. "The winter is a good time to hunker down."
Shane Dingman