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Application Software
Rebecca Buckman  |  February 1, 2016
May the Marketing Force be With You, Says Battery to Vidyard

Yes—that is really Battery Ventures General Partner Michael Brown wearing a Jedi robe.

Brown donned the Star Wars-themed garb to play a role in a video released today by video-marketing company Vidyard* to mark its just-announced, $35 million Series C funding round led by Battery. The video depicts Brown as a Jedi knight who extends 35 million “galactic credits” to rebel Vidyardians intent on disrupting traditional sales and marketing techniques with new video tools and analytics.

Brown’s message is delivered via a hologram projected by that cute robot, BB-8, who starred in “Star Wars: The Force Awakens.”

But Battery’s investment in Vidyard goes beyond this inter-galactic movie spoof. It is actually the result of an on-and-off, three-year courtship that involved trips to Canada, a stint at “space camp” and some on-the-spot negotiating, over dinner, by Battery to help Vidyard upsell an existing customer.

Battery first came across Vidyard years ago as part of its ongoing work studying the marketing-technology market. Battery had made investments in early mar-tech companies like Omniture*, which helped businesses learn how people were using their websites, and ExactTarget*, which helped marketers use email more effectively. It was also an investor in Marketo*, which automates many facets of digital marketing and BrightEdge*, which focuses on search-engine optimization and digital content performance.

Team members at Battery viewed video as “the next big thing” for marketing innovation, particularly for B2B companies, says Battery Vice President Sanjiv Kalevar. They spoke with Vidyard executives several times. Things finally got serious in the spring of 2015 when Kalevar traveled to Vidyard headquarters in Kitchener, Ontario to meet the company’s management team.

And Kalevar had a bit of an “in” with Vidyard CEO Michael Litt: Kalevar and his family are from Canada, and Litt had been an advisor (or “frosh leader” as they are known at the University of Waterloo) to Kalevar’s younger brother in college. In one incident, Litt poured purple paint all over the younger Kalevar as part of a college initiation ritual.

The two brothers “looked a lot alike,” notes Litt, who holds an engineering degree from the University of Waterloo. Kalevar’s brother, meanwhile, is working at a tech startup in Toronto.

But Vidyard said it didn’t need more cash just yet, and Battery needed to perform more due diligence on any potential deal. But as the Battery team began digging into Vidyard’s business, they were increasingly impressed by the company’s customer traction. After some research, partner Brown and Kalevar discovered that Vidyard’s technology–which helps customers better track user engagement with videos—was being used by nearly 10% of the companies in Battery’s investment portfolio.

In early October, Kalevar and Battery colleague Roland Anderson attended Vidyard’s annual user conference, called “Space Camp”, in San Francisco. They were struck by the large number of attendees and customers’ stated devotion to the product. The keynote speaker was, appropriately, former Canadian astronaut Chris Hadfield. He is known for his social-media presence and his viral YouTube video—recorded on the International Space Station 2013—singing and strumming along on a guitar, in zero gravity, to David Bowie’s “Space Oddity.”

“Space Camp was a real eye-opener,” says Kalevar. “There were a ton of people there, and not just software and tech companies. There were businesses selling everything from electrical parts to financial advice to lawn mowers to employee benefits –and they all were using video in new and engaging ways.  That got us really excited.”

Three weeks later, Battery’s Brown trekked to Ontario with Kalevar and Anderson to try to seal a deal. Over dinner at a trendy Kitchener restaurant called TWH Social, Brown re-affirmed Battery’s interest in investing and even helped, on the spot, negotiate a deal to sell more-advanced Vidyard technology to an existing customer—who turned out to be a Battery portfolio company. Brown, who sits on the board of that second company, was texting with the CEO between courses.

By early November, Battery and Vidyard settled on terms for the investment. The two firms collaborated on the funding video in January and announced the transaction Jan. 26. “We’re just trying to make the galaxy safer for all digital marketing and sales professionals,” according to Brown.

This material is provided for informational purposes, and it is not, and may not be relied on in any manner as, legal, tax or investment advice or as an offer to sell or a solicitation of an offer to buy an interest in any fund or investment vehicle managed by Battery Ventures or any other Battery entity. 

The information and data are as of the publication date unless otherwise noted.

Content obtained from third-party sources, although believed to be reliable, has not been independently verified as to its accuracy or completeness and cannot be guaranteed. Battery Ventures has no obligation to update, modify or amend the content of this post nor notify its readers in the event that any information, opinion, projection, forecast or estimate included, changes or subsequently becomes inaccurate.

The information above may contain projections or other forward-looking statements regarding future events or expectations. Predictions, opinions and other information discussed in this video are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Battery Ventures assumes no duty to and does not undertake to update forward-looking statements.

*Denotes a Battery portfolio company. For a full list of all Battery investments, please click here.

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