Elementary, My Dear Video: Elemental Technologies Raises $7.1 Million, Goes After Media Conversion Market

Everyone knows that Internet video is taking off. With the popularity of YouTube, online TV shows, and other video sites, the market seems to be ready. But now there are plenty of new problems to be solved on the technology and business side, from content delivery and coding to search and advertising. And the companies that position themselves with the most attractive solutions will be all set to cash in.

Elemental Technologies may be one of them. Today the Portland, OR-based video software company announced it has raised $7.1 million in Series A funding. The round was co-led by Cambridge, MA-based General Catalyst Partners, which does a lot of work with Internet video entrepreneurs, and Seattle-based Voyager Capital, one of the premier venture companies in the Northwest. The funds will be used to strengthen Elemental’s existing product lines, as well as to “attack new Internet and [Internet Protocol TV] video processing markets,” said CEO Sam Blackman in a statement.

Spun out in 2006 from Pixelworks, a consumer-tech and display company in Portland, Elemental now focuses on the problem of video conversion. For instance, DVD video is in a different format from what runs on the Internet or on mobile devices. So if you want to take TV shows or home movies from your digital video recorder and play them on your iPod during your commute, you need to convert them first. Elemental’s software, called Badaboom Media Converter, does this more quickly and painlessly than was possible before. “It’s about simplicity and ease of use,” says Mike Callahan, the company’s senior technical marketing manager. “We set it up so your grandmother can use it.”

Elemental’s software makes use of the graphics processing unit (GPU) found in most computers and in an increasing number of mobile devices these days. These graphics chips, which range in price from $100 to $500, are much more suited for video processing than conventional microprocessors because they run many more operations (such as converting frames in a video) in parallel. So, using the company’s software, you can convert a two-hour movie from the MPEG-2 format of a DVD, say, to a file that plays on your iPod, all in 20 to 30 minutes instead of several hours—a factor of four to 10 times as much data crunching in a given time, says Callahan.

The payoff is not only on the consumer side, but also in the enterprise and corporate market. Elemental Technologies partners with businesses to make their digital media operations more efficient—for example, a company that builds Web conferencing tools might use Elemental’s software to make sending video data cheaper, and to reduce the number of servers it needs. And big players like Google, Yahoo, and Lycos could potentially be interested for large scale video-archiving and data-conversion applications.

About today’s investment, Callahan says, “We really went out and looked for partners who could help us as we go forward… The funding helps break logjams with getting products out the door—testing and marketing.” The company also has expansion and new targets in mind. The bottom line, he says, is that “We’re enabling more content to become available, and to become available faster.”

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