LDV Quick Thoughts: Vidyo’s Latest Round of Funding


When a surfer paddles out into the ocean, he isn’t just waiting for any wave. He is waiting for the right wave. For his wave. When it hits, he makes his move with everything he got, to ride it as far in as it will take him.

Vidyo thinks this is their wave.

Everything is conjecture when it comes to privately held companies. But that doesn’t stop the speculation and guessing, especially where Vidyo is concerned. Vidyo just announced a $20 million round of financing, bringing their total capital raised to $139 million. The two big questions are why they want the money now, and what they are planning to do with it. As far as the “why” concerned, there are generally two reasons for seeking funds, to address a problem or to address an opportunity. According to Vidyo, this is very much the latter. The company is self-sustaining, but this is a crucial time in the history of VC technology and they want to hit this wave with everything they have.

So what is this “wave” I keep talking about? It is the convergence of several industry, technology, and user trends which are resulting in new uses of video and videoconferencing, all of which could be well supported by Vidyo’s portfolio of patents and intellectual property. In other words, the potential market for The VidyoWorks Platform is exploding.

Vidyo has long been a technology company, trapped in a product world. They basically invented business class videoconferencing over the public internet, and in many ways still have the leading technology for doing so. But for a long time this technology was only used for boardroom to boardroom VC, and they were forced to operate in this limited space. General purpose hardware, and our culture, were not ready to support video everywhere. Today, my smartphone has more brains than the most powerful video appliance made 5 years ago. The hardware is ready. More importantly, the culture is ready. When I was in high school, there was one kid into making videos (he is still doing it, but now he gets Emmy Awards for it). Today, everyone is making videos and more importantly, coming up with creative business applications for it.

There is a lot of talk about “The Internet of Things” and “The Internet of Everything” (I hope we choose one soon). The idea is pretty simple. Computers are now so small, powerful, and cheap that we are putting them into everything from refrigerators to thermostats. If everything is “smart” and connected to the internet, we have a lot of new potential video endpoints. This doesn’t mean everything needs to be video enabled (fridge maybe, thermostat probably not), but certainly the potential for video over the internet is going to increase dramatically over the next few years. Whether or not the industry, and Vidyo in particular, will fully take advantage of this new potential could very well depend on actions taken in the next few quarters. With this in mind, taking a round of financing to get a quick jump on positioning themselves to ride this wave makes a lot of sense.

So why do I think this could be their wave? While I think the entire industry could be getting a boost, an argument can be made that Vidyo is uniquely positioned to benefit from the current market trends. In fact, this will allow them to become the company they have always wanted to be, a pure software platform company. Their concern isn’t whether we are using video for boardroom meetings or Google Hangouts or anything in between. It was never really their goal to productize their tech. If you productize your tech, you sell one product. If you make your technology available as a platform, you can start racking up partnerships and soon find yourself powering a growing list of applications. In other words, Vidyo wants to be the “Intel Inside” of videoconferencing over the internet.

They are already well along the curve, as they power not only the typical enterprise and EDU networks, but are also behind the scenes of the WiiU, Google Hangouts, Banking call centers, telehealth, robotics, and an ever increasing number of these newer, more interesting applications. The goal now is to do more of the same. As companies are discovering new B2C (business to consumer) applications for videoconferencing, they will have to choose the right platform to support it. Vidyo will be using this new round of funding to position VidyoWorks as the gold standard platform for video over the Internet of Everything. Whether its a pizza delivery drone or your basic desktop VC, Vidyo wants the world to know they are ready to make it happen.


About Author

David Maldow is the Founder & CEO of Let's Do Video and has been covering the visual collaboration industry, and related technologies, for over a decade. His background includes 5 years at Wainhouse Research, where he managed the Video Test Lab and evaluated many of the leading solutions at the time. David has authored hundreds of articles and thought pieces both at Telepresence Options, where he was managing partner for several years, as well as here at Let's Do Video. David often speaks at industry events and webinars as well as hosting the LDV Video Podcast.

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