The firm is also planning to raise a European-focused fund from Disney within the next 12 months, Ball says. The fund size of that vehicle is not yet determined.
The Burbank, Calif.-based firm makes investments of $2 million to $15 million in startups that may provide both a financial return as well as a strategic advantage for Disney. The firm is not, however, a corporate VC arm in the traditional sense. Its general partners receive carried interest from their investments and the group stands outside direct corporate overview.
Ball says Steamboat isn’t looking to sell its portfolio companies to Disney, either, despite the obvious synergies. “Does Disney need to own a lot of technology companies? Probably not, but they do certainly need to partner with our portfolio companies,” he says.
The firm’s newest fund is larger than its previous U.S.-focused fund, a $125 million vehicle raised in 2006 that is now about 60% committed. The firm’s first fund, a $75 million vintage 2000 fund is now in “full harvest mode,” according to Ball. The firm has focused on digital media since its founding.
“We saw it coming like a freight train how technology and innovation was going to fundamentally change the media business,” Ball says. “The Napsters and the TiVos were based on technology and almost overnight, in the scheme of things, you had the music industry turned upside down and the TV industry seriously scratching its head.”
Steamboat did well when
Steamboat was also an investor in advertising network
Among its other exits, Steamboat sold mobile display company
These positive results have helped the firm expand beyond the United States. Steamboat raised a $175 million Asia-focused fund in 2006, which is between 40% and 50% committed, according to Ball. To invest in Asia, the firm hired five investment professionals in Hong Kong and Shanghai. To date, it has made five investments in China, backing such companies as online video sharing site
Digital content distribution technology companies are particularly interesting to Steamboat because of the opportunity to use their creations inside Disney. Consider its investment in
Motive, based in American Fork, Utah, makes video content distribution software optimized for streaming video and commercials. It has raised $97 million from Steamboat,
Broadcaster ABC, a Disney subsidiary, became an early and marquee customer of Move Networks in 2007. The television station now uses Move’s technologies to broadcast in near high-definition to Internet users.
Quigo was another beneficiary of the Steamboat-Disney connection, Ball says. The company sells a service that optimizes the online advertising inventory of content sites. Ball introduced the company to the appropriate people at Disney-owned ABC.com and ESPN.com.
“They ended up signing some large contracts,” Ball says. “Those were probably company-making deals.”