How is the funding environment shaping up for video technology in 2019? As we pass the mid-year mark, let’s see how the year-to-date metrics compare to the historical trends. The graph below shows video technology total funding by year, stacked by quarters.
As the graphic demonstrates, video technology has amassed $2.5B through Q1 and Q2 of this year. This amount represents 33% of the total funding in 2018, and 46% of the funding through Q2 in 2018. The top three funding events in Q2 2019 include an $876M round into Bilibili, a $327M round into Huya.com, and a $250M round into Vice Media.
A straight-line projection of the completed funding this year would result in $5B, which is 66% of the total 2018 funding. By the same token, a weighted quarterly average projection of 2019 funding would result in $3.4B, which falls short of the total 2018 funding by 54%. Therefore, based on the mid-year data, video technology funding in 2019 is projected to diminish from the funding in 2018.
How has the exit activity for video technology developed in the first half of 2019? This blog post explores video technology exit metrics through Q2 2019 and compares them to previous years. The graph below shows the number of video technology exits by year, stacked by quarters.
As the graphic demonstrates, video technology has seen a total of 15 exit events through Q2 of this year. This represents 71% of the total exits in 2018, and 94% of the exits through Q2 in 2018. Some of the exit events in Q2 2019 include Hulu’s acquisition by Disney Interactive, Magisto’s acquisition by Vimeo, and Fastly’s IPO.
A straight-line projection of the completed exit activity this year would come out to 30 exit events, which exceeds the total exits in 2018 by 43%. On the other hand, a weighted quarterly average projection of 2019 exit activity would come out to 20 exit events, which falls short of the total exits in 2018 by 6%. Therefore, based on the mid-year data, video technology exit activity in 2019 is projected to be relatively on par with the exit activity in 2018.
The video technology industry has seen 1,635 investors and $42B total all time funding. Let’s analyze which video technology categories have the most number of investors actively financing the startups. The graphic below highlights video technology categories based on the number of investors in each category.
As the graphic demonstrates, Video Advertising Platforms has the highest number of investors at 422, with Video Distribution Platforms following behind at 383. Video Advertising Platform companies include ad networks that help marketers by finding and aggregating the supply of publisher inventory. Video Distribution Platform companies enable users to upload their videos and automatically distribute content across a variety of destinations. In addition, the average number of investors across all video technology categories is 272.
This blog post examines the different components of the video technology ecosystem. We will illustrate what the categories of innovation are and which categories have the most companies. We will also compare the categories in terms of their funding and maturity.
Video Advertising Platforms and Social Video Platforms Are The Largest Video Technology Categories
Let’s start off by looking at the Sector Map. We have classified 857 video technology startups into 11 categories. They have raised $41B from 1633 investors. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.
We see that Video Advertising Platforms and Social Video Platforms are the largest categories with 154 companies each. The Video Advertising Platforms category is comprised of ad networks that aggregate the supply of publisher inventory, ad servers that facilitate the delivery of ads, and marketplaces that connect ad buyers and sellers. Some example companies in this category include Brightline, Videology, VideoAmp, and Connatix.
The Social Video Platforms category, on the other hand, is comprised of social networks built around video and television content, as well as applications used by the end-users alongside TV programs to offer enhanced viewing experiences. Some example companies in this category include YouNow, Kuaishou, LiveMe, and Dubsmash.
Let’s now look at our Innovation Quadrant to find out the funding and maturity of these categories in relation to one another.
The Established and Pioneers Quadrants Have the Most Video Technology Categories
Our Innovation Quadrant divides the video technology categories into four different quadrants.
We see that the Established and the Pioneers quadrants both have the most number of video technology categories at 4, each accounting for 36% of all video technology categories. The Video Licensing category has both the highest average age and the highest average funding. On the other hand, the Video Discovery and Video Analytics categories are low on both average funding and age.
For this quarter’s funding analysis, let’s examine how average funding in the video technology sector is evolving. The graphic below shows the video technology average funding across all deals over time by quarter.
As the graphic demonstrates, video technology average funding event size in Q1 2019 was at $41M, which decreased by 35% from the $63M last quarter. The average funding size has been on a general upward trend, with the average funding size last quarter about twice as large as it was 5 years ago. The top three funding events in Q1 2019 include a $153M round into Hotstar, a $140M round into CuriosityStream, and a $80M round into Zuiyou.