BitTorrent raises $17M more

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Peer-to-peer content delivery system BitTorrent has raised a $17 million more in a third round from DAG Ventures and return backers DCM and Accel Partners, according to a regulatory filing. The funding brings the 7-year-old’s total capital raised to nearly $47 million.

DAG Ventures, a firm known for marking up the later-stage deals of influential investors, such as Kleiner Perkins Caufield & Byers and Accel, has teamed with Kleiner on at least 51 rounds for 30 companies, according to Thomson Reuters (publisher of PE Week) and has teamed up with Accel on at least 30 rounds for 15 companies.

The latest funding comes as BitTorrent last week signed agreements with two game developers to use its technology to stream their massively multiplayer online games to customers. BitTorrent is still struggling to shed its reputation as a way for people to illegally share music and video over the Web. Though it wants to be a legitimate technology through which media companies can stream videos over the Internet, its ideal business partners aren’t buying its reformation story yet. In fact, just last month, the company was forced to lay off one-fifth of its 60-employee staff.

It’s also been hard for media companies to grow enthusiastic about the technology, because a subset of P2P users often blamed for slowing down the Internet with their massive amounts of information swapping, much of it illegal.

Also, BitTorrent is facing stiff competition. Amazon.com and iTunes sell downloadable films, TV shows, games, music and software. —Constance Loizos