Don't Stop Believing - Imagine Communications Scores $15M for Broadband TV

The Broadband TV niche in Israel is on fire. Following RayV's $8M round earlier this month, Israel-based Imagine Communications announced a second round and a hot upcoming deal.

Imagine develops Personalized TV technologies for video on demand (VOD) and Internet Protocol TV (IPTV). Imagine claims that its next-generation multiplexing technology, the QOD Gateway System, provides operators with:

• 50%-100% more streams on existing network infrastructure
  
• Greatly enhanced video quality
  
• Future PersonalizedTV applications such as targeted ads and personalized audio

The platform uses a variable bit rate (VBR) platform. By employing VBR, a technique that changes bit rates on the fly, Imagine believes it can cram 15 standard-definition streams into one QAM channel, versus 10 streams using fixed, constant bit rate (CBR) technology. The efficiency also applies to high-definition television.

Founded in October 2004, Imagine Comm was previously known as QoD (Quality on Demand), the name of its initial product. Imagine previously raised $9.2M from Carmel Ventures II and Columbia Capital back in 2006. In its current round, Imagine Comm is raising $15M from previous backers and according to rumors also from US based Court Square Ventures (CSV). In addition to the financing round, Imagine Communications is also rumored to be on the verge of signing a significant long term partnership with a European communications mogul.

The founders of imagine are both veterans of BigBand Networks, one of Israel's biggest IPOs ever. CTO and Co-founder Ron Gutman, former director of customer solutions at BigBand and SVP of Product Doron Segev, former lead of product and engineering for video apps at Big Band.
In June this year, BigBand filed a patent infringement lawsuit against Imagine Comm, claiming that Imagine's co-founders are infringing three of BigBand's patents on video processing and bandwidth management.

The company is based in Cardiff by the sea, CA and has offices in Israel as well. It currently has a head team of 35.

Who will create the world's first Virtual TV Network?

NBC, BBC, ABC... and maybe soon RayV TV as well. Israeli RayV raised a second round of $8M to develop live 24 hour broadcasts of quality programming for the PC and TV in what they call a "Virtual TV Network". Facebook's investor Accel Partners, one of Israel's most active VC funds, financed the round. Accel has more than $4B under management worldwide, $1B of which in two European funds that also invest in Israel.

So what's a virtual TV Network (VTN)?

According to the stealth-mode start-up, RayV developed proprietary internet protocols forming a generic grid network, basically enabling anyone to broadcast live TV to an unlimited amount of concurrent viewers at zero cost.

In other words, the first Virtual TV Network is a secure, scalable and manageable distribution vehicle of live real-time media without the need for centralized network resources. Similar to free web TV service Joost, RayV is also requires a download. You can get the beta here.

What are the benefits for the consumer?
According to RayV's website:

"Sure, we love the big networks - after all, they show us all the live Paris Hilton we can handle - and lots of other stuff too. We just want it at high quality on our TVs and on our PCs, anywhere in the world... and more...

We also want to watch live news channels from smaller, independent sources with correspondents around the world. We want channels of live performances from the newest bands at the University of Calcutta. And live coverage of rugby matches from England. And short-film channels from NYU Film School students. And coverage of local politics. And cooking channels for Vegans. And cooking channels for Carnivors."

RayV is not the only one attempting to join MetaCafe and BlogTV on the list of successful Israeli Video startups. Several Israeli companies are working on IPTV solutions:

• TVdoTV - The next generation of web TV
• Koala Technogies -Developing innovative interactive systems
• And possibly boxee - still in super stealth mode

RayV was founded in January 2006 by Omer Luzzatti (CEO), Ron Zuckerman, and Oleg Levy. It has 15 employees and offices in both Tel Aviv and New York.

Source: Globes