Hotelevision Inc., a New York-based distributor of cable television to luxury hotels, last week secured a $15 million Series A preferred round of venture financing. WS Investments, a partnership based in Princeton, N.J., was the round’s only investor.
The company feeds 10 cable channels – A&E, CourtTV and ESPN among them – directly into hotel rooms. Viewers perched in their hotel rooms, however, will not see the same commercials shown on local or national television. Hotelevision strips those commercials out and drops in advertisements from high-end brands that cater to business travelers like BMW, Orbitz and Mercedes-Benz. Hotels don’t pay for Hotelelvision’s programming, nor do they pay for the system’s installation. Instead, the company shoulders those costs with a business model based on advertisers.
Currently Hotelevision feeds cable programming into 133,000 rooms in 375 hotels nationwide. It has partnerships with chains like Hyatt Hotels, Omni Hotels and Wyndham Hotels & Resorts.
This round of financing in enough to bring 200,000 systems into hotel rooms by the end of this year and to add another 100,000 by the end of next year. The capital will also be used to expand the company’s sales and marketing team as it grows, says Chief Financial Officer Brendan Moore. The company is already generating revenue, but this round of capital is what it needs to kick it into cash-slow positive territory.
Founded in 1998, the company secured a $2 million seed round in August 2002, when Continuation Investments Partners pegged the company’s valuation at $25 million. Continuation Investments Partners maintains an equity position in the company, but did not reinvest in this round.