Whipclip, App That Shares Video Clips, Raises $40 Million
By Michael J. de la Merced
The New York Times
July 8, 2015
SAN FRANCISCO — Investors are betting big on video audiences sharing clips online — in a way that benefits both watchers and the producers of that content.
Whipclip, the maker of a video clipping-and-sharing app, said on Tuesday that it had raised $40 million in a new round of financing, led by Eminence Capital, a $6.4 billion hedge fund.
The investment is a vote of confidence in the not-quite-two-year-old Whipclip, which aims to make it easier to share clips from TV shows.
One differentiator, according to the company’s chief executive, the serial entrepreneur Richard Rosenblatt, is that Whipclip is working with content providers. Among its current backers are the Raine Group, whose investment banking arm has worked on scores of media deals; the talent agency mogul Ari Emanuel; and Ziffren Brittenham, one of the top legal advisers to media companies.
Mr. Rosenblatt pointed to the growing prevalence of video sharing on social networks, contending that Americans post more than 70 million messages about TV on Twitter each month, and that a huge majority of TV viewers have a second screen online when they watch.
That audience, he said, is eager to find a way to capture clips from what they are watching and share them with their friends and followers. The technology can also be employed by other users, such as media outlets, which can post segments from shows before receiving them from the content producers or which no longer have to rely on illegal clips posted to video sites.
Mr. Rosenblatt has his own personal experience with the issue: Last year, he wanted to share a clip of the pro football player Richard Sherman trash-talking a rival, but all he could find was a clip that someone had taken and uploaded using a smartphone.
”It was one of those ideas that you just look at and wonder, ‘Why when I’m watching TV, can I not share it right then and there?”’ he said. ”It’s amazing how broken the music-TV-online system is.”
Whipclip was born soon after, incubated in part in Raine’s Los Angeles offices. It has grown to a 50-employee company with headquarters in Santa Monica, Calif., and Tel Aviv. The company has an app for Apple’s iOS and will soon introduce a service for Android devices.
Crucial to the service, according to Mr. Rosenblatt, was wooing content providers. His argument has been that by letting users share clips from the shows they watch, media companies benefit from additional promotion.
That pitch has led to relationships with the major broadcasters like ABC, CBS and Fox, as well as cable television networks and music companies like Universal Music Group and Sony Music.
At the moment, Whipclip is not trying to make money from its service. But at some point in the future, the company could offer paid promoted clips, advertising and other ways of drawing revenue, according to a person close to the company.
It is that promise of a bigger future that has drawn new investors. During a trip to New York, Mr. Rosenblatt recounted, he was approached by a number of firms including Eminence. At the time, Whipclip was not looking for new financing. But ultimately, conversations with those financial firms transformed into discussions about raising new money.
”We came to believe Eminence had the same vision we did,” Mr. Rosenblatt said. ”We want to be a very large company.”
As part of the round, Eminence will receive a seat on the start-up’s board.
”By partnering with leading networks and content providers Whipclip is truly pioneering a new model to allow viewers to discover and interact with great content from broadcast media and the music industry,” Ricky Sandler, Eminence’s chief executive, said in a statement.
The round remains open, as Whipclip begins talking with content partners about participating in the financing, people briefed on the matter said. The company is expected to close the investment in about two months.
Raine and the law firm Latham & Watkins advised Whipclip on the investment.