With fresh funding from some high-ranking sports executives, You.i TV is looking to add up to 100 employees to its bench in a play to dominate the sports media market.
The Kanata-based company announced Tuesday morning it has raised US$23 million in financing (a bit more than $30 million in CAD) in a round led by Massachusetts-based Causeway Media Partners. Previous investors Kayne Anderson Capital Advisors, Vistara Capital Partners and WarnerMedia also joined in the financing.
Causeway partner Bob Higgins will join You.i TV’s board of directors. A release from the Kanata firm notes that the U.S. fund is focused on supporting growing companies in the sports media and technology spaces. Its partners include the owners of the Boston Celtics, San Francisco 49ers and a variety of other National Basketball Association, National Football League and Major League Baseball teams.
Targeting a market disrupted by the emergence of streaming services such as Netflix, You.i TV develops cross-platform video applications and advertising interfaces for customers including National Geographic, Fox and AT&T.
Sports media is an emerging market for the software firm, says CEO and co-founder Jason Flick. Deals struck with the NBA, NFL and Canadian Football League in the past few years have guided You.i TV towards opportunities in sports television, where the leagues themselves are increasingly looking to take their content direct-to-consumer.
“All of these guys now have to be like Netflix. That means becoming a serious tech company,” Flick says. “That’s the problem that we solve.”
Driving straight to the hoop
Leagues and broadcast rights owners need to figure out ways to get their programming on to a variety of endpoints: tablets, game consoles, smart TV and set-top boxes. Rather than program custom apps for each device, You.i TV simplifies the problem with its singular code that can run across all of these endpoints.
Sports media is an enormous potential market, Flick says, because of the dominant hold each of these leagues has over its own brand of content.
“There’s no second place to go get the NBA. It’s the NBA or no,” he says.
With its technology now market tested and approved – media giant Time Warner is both a customer and led the firm’s series-B investment round – Flick says the company started looking for a series-C round this past year to scale up and take its product further.
Flick calls finding Causeway “serendipitous.” The sports-focused fund was hearing from its clients that going direct-to-consumer was a common challenge at the same time that a customer of You.i’s introduced the two parties.
“They were coming to us because a bunch of their clients … were talking about this problem they had and we were solving it,” says Flick.
Broken ad breaks
The other significant shift that came with the advent of streaming has been a disruption of traditional advertising models. Flick says that while older generations are used to the concept of a “commercial break,” younger consumers want a more integrated advertising experience that doesn’t disrupt the flow of content.
Part of this funding will go towards building out You.i TV’s advertising experience technology, currently one of the firm’s side projects. The firm’s CTO and co-founder Stuart Russell told Techopia earlier this year that the future of advertising is about getting more abstract with placements, like making the loading bar a Coke bottle that pops its lid with a promo code when the show’s done buffering.
Higgins said in a statement that unlocking the future of advertising will play a critical role in the continuing evolution of sports media.
“We’ve been courtside watching media companies endeavor to get the user experience right, knowing that the consumer is the ultimate arbiter of what can make or break a business these days,” he said.
“Today, content owners trade off between engagement and monetization, and we think You.i TV’s product unlocks unlimited potential for changing that equation.”
On the headcount side, Flick said he anticipates adding an extra 50-100 employees in the next 18-24 months, with 80 per cent of the hires coming in Ottawa, where the firm recently moved into a new building. The company will also use the latest financing to build out a developer community and fund expansions deeper into markets such as Europe and Latin America where it already has a modest customer base.