Armed with an animated cadre of thinly veiled television talk show parodies, online entertainment distributor Mondo Media Inc. recently secured just over $17 million in its third round of venture capital funding.
The deal follows up on last February’s $20 million Series B round and is being viewed by the San Francisco-based issuer as its final private equity play.
Due to logistical issues surrounding the involvement of German incubator Venturepark, the second round transaction was split into two tranches, with $15 million being raised back in September and the remainder picked up by Venturepark just a few weeks ago.
While the time lapse certainly led to some extra paperwork for Mondo’s financial team, it did not have any impact on the company’s $69.3 million valuation.
Hard Cash from Softbank
Softbank Venture Capital led the second round transaction with a $12 million investment and was joined by Venturepark and existing backers Foundation Capital, Red Rock Ventures and Sofinnova Ventures.
“I really don’t know of any other company quite like them,” said Paul Koontz, general partner with Foundation Capital. “There are a few other companies that have aspired to do syndication and many who have focused on digital content creation, but this is the only one out there doing both. That’s important because we wouldn’t have invested in a pure content company.”
Indeed, Mondo has made a name for itself among investors and media watchers alike by first producing such programs as Thugs on Film and The God & Devil Show, and then distributing them to high-traffic Web sites like Lycos.com and Shockwave.com. Moreover, Mondo also reserves the right to insert and reap revenue from rich media in-show advertising.
“These are different from banners – which the Web sites themselves manage – because they are part of the shows themselves… and can’t really be gotten around,” said Tim McNally, chief financial officer with Mondo Media.
McNally added that multiple revenue streams were one of Mondo’s most attractive features when it came to securing additional venture financing.
“We launched this deal in the summer and the first reaction was general trepidation over online content, but [the VCs] were much more comfortable with our content and distribution model.”
The company currently anticipates profitability in the next 12 to 18 months, at which time it hopes to initiate an initial public offering.
“$17 million should last this company until [an IPO],” Foundation Capital’s Koontz said.
As part of the most recent transaction, Softbank Principal Managing Director Carl Rosendahl received a seat on the Mondo Media board of directors.
“I’m still a firm believer that content will be very important on and beyond the Internet,” Rosendahl said. “And Mondo is one of the early players here when it comes to dealing with both production and distribution.”
Dan Primack can be contacted at Story Feedback.