In India, prices of DVD players falling by a third have been a catalyst for exponential growth in the home entertainment sector over the last 2-3 years.
India’s largest online DVD rental company, Seventymm, secured third-round financing of US$12.5 million from NEA Indo US Ventures. Launched in 2006, the Bangalore-based firm has raised $22 million venture capital to date from Matrix Partners India and Draper Fisher Jurvetson.
Seventymm recently received a PC World Web Award for Best Indian movie rental website 2008 based on 3 categories in “Best Design, Best Technology Usage and Overall Winner”. It was lauded as being not just a movie rental site but more importantly, “a movie-based social community site”.
According to estimates by India’s top industry body FCCI and PricewaterhouseCoopers, the home video market is growing at 30% annually and projected to grow 70% over the next 5 years. The report estimates the installed base of DVD players at about 47.4 million by the end of 2008.
Other major players in the fast developing sector includes Reliance ADAG’s BigFlix and Nimbus Communications’ Showtime. Reliance aims to open as many as 500 Bigflix stores by the end of this fiscal in around 30 cities, apart from franchisee outlets.
Last year Seventymm had acquired Delhi-based online DVD rental firm Madhouse, which had received angel investment of $228,000. The new funds will go towards scaling the business to reach 4 million members in next 5 years with a presence in 40 cities by end-2009, from its current operations in 6 cities (Bangalore, Chennai, Hyderabad, Mumbai, Delhi and Chandigarh) and 70,000 members.
This investment is NEA Indo US Ventures fifth investment announcement in the last 3 weeks. Only yesterday it had announced a $2 million investment in Chennai-based Basiz Fund Services.
Late last month it had invested $2.25 million in Banglore-based Idenizen Smartware Pvt ltd, a technology solutions provider for the education vertical. Then it invested $4 million in India and US-based e-publishing firm Pre-Media Global USA Inc. It also co-invested along with DFJ in Delhi-based e-waste management company Attero Recycling Pvt. Ltd. (Source: VCCircle).
