The competition for consumer attention never ceases, and Austin-based streaming TV platform Atmosphere believes it's at the confluence of two emerging trends that are allowing it to win a hearty share of eyeballs.
One of those trends is the tendency for consumers and advertisers to shy away from social media platforms that create privacy concerns. The other is the growth of out-of-home advertising, which are the ads you see on screens everywhere from restaurant walls to gas pumps and bus stops.
"We're sitting in a really nice place because we do reach a quote unquote unreachable audience sometimes, typically where advertisers can't find their core demographic on a social media platform or on television or on radio or on print," co-founder and CEO Leo Resig said. "And so I think that's where we're taking advantage of two mega trends."
Investors see an opening for Atmosphere's viral video platform to go far beyond the nearly 19,000 customers — including bars, gyms, auto shops and hotels — that it has already reached. The company announced Jan. 4 it has raised $100 million in new funding. That includes $80 million in equity funding led by Connecticut-based Sageview Capital, along with Chicago's Valor Equity Partners and Austin-based S3 Ventures. It also secured $20 million in debt funding from Bridge Bank.
Resig declined to update its valuation, which was last pegged at $275 million in April 2021 when it raised a $25 million funding round.
"But what I can say is we're knocking on the door of unicorn status," he said, referring to privately held startups valued at $1 billion or more.
The Austin-based startup, which operates legally as Rarefied Atmosphere Inc., has built a niche out of finding, licensing and curating short, engaging videos. It offers its streaming device to businesses, typically those where folks have built-in viewing time and tend to watch whatever's on a nearby screen, such as waiting for an oil change or running on a treadmill. The videos are audio-optional, meaning they can work just as well in a crowded and noisy bar.
Atmosphere has estimated there are about 2.5 million retail businesses that could potentially use its streaming service.
The startup operates across 64 channels, which includes those addictive fail videos and other viral content, in addition to more ambient videos and partnerships with Red Bull and X Games. It charges a one-time $99 activation fee for its hardware and programming. Atmosphere generates revenue off of ads mixed in with the curated content.
Resig and his brother, John Resig, previously founded viral video platform Chive Media Group Inc. in 2008 and spun Atmosphere out of it in 2019. Atmosphere has now raised more than $140 million. Dean Nelson, a senior partner at Sageview, is joining the company’s board as part of the new funding. Roberto Avila, principal at Sageview, will join as a board observer.
Atmosphere currently has about 260 employees at its headquarters in Austin and offices in Los Angeles, New York, Chicago and London. It's pouring a lot of its new funding into hiring roughly 350 people during 2022. Most of those jobs will be Austin-based.
With explosive growth from other Austin startups, as well as tech giants like Apple and Amazon growing their local hubs, many companies struggle to find the right talent, especially for highly technical positions. Resig said Atmosphere, which has been growing its sales and distribution teams, has been able to rapidly hire with ease.
"We're finally at that stage of maturity, even if it's in the second or third inning of our business, that people are getting more confident to come join our team," he said. "And they still feel like they're early and then on a potential rocket ship and soon to be unicorn business."
Resig hinted at a flurry of forthcoming announcements for Atmosphere as it expands its brand and footprint.
"It's one of those very predictable customer acquisition growth businesses that you literally add talented sellers to go out and give them the playbook to acquire new businesses," he said. "And it just works. It's a very efficient means of customer acquisition. So literally, we just can't hire enough people fast enough."
