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Video Browser Startup Shufflr.tv Parent Althea Systems Raises $3M; Plans, Monetization


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Althea Systems, a Bangalore based social video browser startup that launched its Adobe Air based application Shufflr.tv two months ago, has raised $3 million in Series A funding from an institutional venture capitalist, co-founder Rajnish R told MediaNama. Rajnish declined to disclose the company’s backers, saying that the VC wants to make an announcement at their own discretion; he also declined to comment on how much stake ahs been sold. The $3 million is on the basis of what the company has planned to do over the next 18-20 months, the products they intend to roll out and the markets they want to reach.

Shufflr.tv provides a clean interface for discovering new content, and has content deals inked with NDTV, Reuters, CNBC-TV18, BigFlix in India, the BBC and MSNBC in the UK, and also with Brightcove which aggregates a large number of content providers. They’re also aggregating content from YouTube, DailyMotion, Metacafe and Yahoo Videos, are in talks with STAR TV, and working on breaking into the larger US based customers.

The focus, clearly, is the global market, and while the company has declined to disclose its total number of users, Rajnish says that initially they saw users from US, UK, Canada, Singapore, Hong Kong, Malaysia, India and Pakistan, and after launching Spanish content, from Spain and Latin American countries.

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The Shufflr Premise; Plans To Open Up API; Platforms & Devices

Shufflr works on the premise that there is a substantially large amount of video content available on the Internet – around 36,000 hours of content uploaded every day Rajnish says, and there is a need to enable content discovery. “Most of us are interested in videos that cater to our particular taste, what our friends are watching or what is trending. What we’ve done in Shufflr is that we’ve used a video stream technology that filters videos on the basis of what you want to watch. As you use more of the product, the algorithms learn more, and we make better and better recommendations. The second key section is on the basis of what your friends are watching, and the third is about what is trending globally.”


Rajnish, co-Founder, Althea Systems

But isn’t it very easy for YouTube to also roll out the same features, addressing a larger user base? Rajnish says that they have 140 channels of content on Shufflr, and are we’re pulling the video player directly into shufflr, while YouTube is dependent on the content owners uploading content. “We are beyond YouTube, DailyMotion, Metacafe and things like that – we’re also trying to look at a lot of content which will probably not find itself on broadcast – a channel on wine, a recipe channel, a lifestyle channel like Maxim. The breadth will be much wider.”

Shufflr has a platform called Shufflefeed, which sits in the cloud, and content can be pulled using their APIs. “We will build more clients, for the web, facebook, smart phones and other devices, and we’ll open up the API to let others build their own application. We’re testing it using Shufflr.tv, looking into what more can be added to Shufflefeed,” Rajnish says.

Monetization

At present, the monetization is on the basis of advertising that is being served by content owners: Shufflr.tv and Shufflefeed serve primarily as content discovery platforms, and are not doing sales. So the videos served showcase pre-roll and post-roll advertising, and a revenue share is collected by Shufflr from the content owner. Rajnish says that this is the initial model, and they’ll experiment with an affiliate model, a device based (Boxee) model, a featured search content and premium content model. “Today the models around video are evolving quickly. We will try all the models, and see which one works for us.We realized that when you’re doing large deals with very large operators who have a large sales force, and their CPMs are higher, it makes sense to leverage their strength.”

Shufflr doesn’t yet have deals with content aggregation sites like YouTube, DailyMotion and Metacafe, but serves their ads. So then why would the likes of YouTube want to give them a revenue share when Shufflr is already serving their content with advertising? Rajnish says that “YouTube will, at some point in time, think through about what they want to do with their distribution model.”

Team & Advisors

Althea Systems is founded by Vinod GopinathKishore AKVijay Sagar and Rajnish. Prior to joining Althea, Rajnish was Director-Advertising and Publishing Services (Microsoft Advertising) at Microsoft India. The company currently has seven people, and wants to be anywhere between 25 and 40 people, depending on the products they decide to roll out. Most of the additons they’re targeting are on the engineering side. Most of the money raised will be used for engineering and building new products, for consumer acquisition and marketing.

On its advisory board are Reliance Entertainment President Rajesh Sawhney; Arun Johary, who was previously the co-founder of Armedia Labs (acquired by Broadcom) and CTO of Sage Inc/Genesis Microchip (IPO, acquired by Genesis) and Co-Founder of Truespan (acquired by SiRF); Ramesh Haridas, who is a partner at HT Ventures, and was the Founder and CEO of PrivacyBank.com (acquired by Infospace) and Founder and CEO of Chintano (acquired by Datran media), and has also invested in Blip.tv, iMedix, Zedo, Webchutney (sold stake to TV18), among others; Sunil Krishnan, the President of Confident Group, previously the Director (Finance), South East Asia for Hewlett Packard, and the CEO of incubator Stratos Management, is also an advisor.

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  • Sergey Brin

    “YouTube will, at some point in time, think through about what they want to do with their distribution model.” – Eric Schmidt – Are you listening?

  • Sidman

    Congrats to the Shufflr team on the Series A and good luck!