Vessel, the online video firm that has licensing deals with major labels Universal Music and Warner Music as well as a host of YouTube creators, has announced a Series B funding round of $57.5m.
Previous investors Greylock, benchmark and Bezos Expeditions – the personal investment vehicle of Amazon chief Jeff Bezos – participated in the round, but it was led by another Silicon Valley VC firm: Institutional Venture Partners.
Vessel isn’t saying how much the new round values the company at, but IVP’s involvement is significant given its previous investments. “We have invested in over 300 companies and 101 of those companies have gone public so far,” wrote general partner Todd Chaffee in a blog post.
“We are currently investing our 14th fund and have been fortunate to back many great companies such as Dropbox, Domo, HomeAway, Kayak, LegalZoom, LifeLock, Netflix, Shazam, Snapchat, Supercell and Twitter. We believe Vessel has the potential to be as successful as these companies someday.”
Vessel launched in January as an app and website serving up shortform videos from vloggers, musicians and other online creators. Although it carries advertising, its main business model is a monthly $2.99 subscription, with the promise that videos on its premium tier will be exclusive to Vessel for at least 72 hours before they are published anywhere else – i.e. YouTube.
For YouTube creators, the company’s pitch is that they’ll make much more money per thousand views than they do on Google’s video service during that exclusivity window. But that’s a pitch also calculated to seduce the labels that are unhappy with YouTube’s payouts for their music too.
Warner Music Group was a launch partner for Vessel, with UMG quickly signing up in February too. The labels will put certain music videos on Vessel before other services – including Vevo, which is a partner for Vessel’s free tier.
Various WMG labels are debuting new videos from artists including Blake Shelton, For King & Country, Hunter Hayes, Jana Kramer and Kaskade. Music video parodist Bart Baker and YouTube boy-band Boyce Avenue are the biggest music names from outside the label ecosystem on Vessel, meanwhile.
“Vessel represents the latest business model innovation for premium short-form content,” said UMG boss Lucian Grainge in February, praising the team and technology being built by former Hulu chief Jason Kilar.
Grainge also talked about Vessel in his appearance the same month at the Code/Media conference in California: “We’ll see how they’ll do, but if we’re going to transition to premium subscription, it’s a great part of that journey.”
Vessel has now raised $134.5m – its Series A round in June 2014 was $77m – with sources close to the company saying the bulk of that first round remains in the bank and ready to be deployed as it expands its headcount and creator roster.
Its most recent non-musical coup was signing up US chat-show host Ellen DeGeneres, who is making videos available on Vessel’s premium tier, but also promoted the app by offering fans a free year’s subscription if they signed up quickly.