Softcom Wraps $22M Private Round

Continuing the attraction of video-streaming technology companies to venture capital firms, Softcom Inc. recently raised $22 million in venture financing.

The company has developed an interactive video technology that will support, among other sites, the online video portion of The Sopranos Web site.

Allen & Co. placed the offering for the New York-based company, securing J.&W. Seligman as the lead investor.

Other new investors included Tudor Private Equity Fund, Chilton Capital Management, Warburg Pincus Asset Management, Michael Price and Essex Investment Management Co. Existing investors that re-upped in the round were PS Capital Ventures LLP, Mitchell & Co. and Ramsey Beirne, said chief executive Mark Leiberman. Allen & Co. made an equity investment along with providing placement services.

A substantial portion of the proceeds from the offering will be used to add employees, particularly to the production, marketing and sales teams. Leiberman said that would require the company to also look for more office space and additional proceeds will be poured into infrastructure to support its content creation.

Softcom serves customers by first evaluating the current video assets in order to determine how best to derive revenue from those assets. Once a plan has been formulated, the company then creates the site, which it hosts and improves for the customer going forward. Softcom’s revenue depends to an extent on the performance of the site, as the company, in addition to an upfront payment, receives a portion of the revenue the customer gleans from the site.

“We call our model an ASP model … [we] host for the customer and through revenue sharing put our interests in lockstep with the customer,” Leiberman said.

He added that the company’s head of content formerly worked with Classic Sports Network, the cable channel owned by ESPN.

The current financial plan calls for this financing to last the company at least 18 months, and Leiberman did not comment on whether the next financing would be in the public or private markets.