Despite all of its pending legal issues and challenges, the investment community continues to believe in the controversial streaming-television service. Aereo says it has raised $34 million in Series C financing to expand into additional cities.
Investors in the round include Himalaya Capital Management and Gordon Crawford, the former Capital Group Cos. fund manager. Barry Diller’s IAC/InteractiveCorp (IACI), Highland Capital Partners and FirstMark Capital also added to their investments in the company.
Crawford, a media and entertainment industry veteran, is one of the industry’s most influential and successful investors, having worked at Capital Research and Management for 41 years. Himalaya Capital Management is led by global investor and human rights activist Li Lu.
“Aereo experienced tremendous growth in 2013 and we expect 2014 to be another blockbuster year,” said Aereo CEO and Founder Chet Kanojia. “Last year at this time, Aereo was launched in only New York City. Today, Aereo is available in 10 markets and will grow to 15 by the end of the quarter. In 2013, we also launched our first native app for Android, made improvements to enhance the user experience and more than doubled our employee headcount. Consumers are craving choice and options and as a result, we continue to see explosive growth across all our markets.”
Aereo is currently available to residents in the following markets: New York City, Boston, Atlanta, Miami, Salt Lake City, Houston, Dallas, Denver, Detroit and Baltimore.
The company plans to add five more markets by the end of March and has increased its staff to about 105 people from 40 employees last year, Kanojia said.
RBR-TVBR observation: Aereo had planned to be in 22 cities by the end of 2013, but it’s in 10. It blames unforeseen challenges in building out its infrastructure. Perhaps the challenges were a lack of capital. Either way, the new funding means the investment community still believes Aereo is viable and that it will likely win court challenges from broadcasters in the end. Do they know something that we don’t?
Meanwhile, the Supreme Court will say as soon as 1/10 whether it will grant cert to consider the broadcasters’ bid to stop the service. Consider that if it is “shut down,” the company still may be able to strike retransmission deals with the broadcasters like any MVPD.