VideoBlocks, the Reston, Va.-based Shutterstock competitor and subscription-based provider of high quality video, picture and audio content — has secured an $8 million funding round in the form of convertible debt led by North Atlantic Capital. The venture capital firm specializes in quickly growing recurring revenue businesses.
In an interview with DC Inno, VideoBlocks CEO and founder Joel Holland said the funding will be used to expand his marketing and engineering teams, advertise VideoBlock’s new marketplace platform and for general marketing purposes. The startup currently employs about 50 full-time.
The raise follows the establishment of VideoBlocks' user-based content marketplace platform in April — where user-generated content can be posted and sold in a format where creators are paid 100 percent of the proceeds. There are about 2,000 users currently selling content via the VideoBlocks marketplace.
VideoBlocks hopes that the growth of its video content marketplace will encourage existing customers to renew subscription at a higher rate and help add new subscribers, Holland told DC Inno.
The VideoBlocks.com site offers video content (a sort of Shutterstock for video), while VideoBlocks runs two subsidiaries—GraphicStock.com (images) and AudioStock.com (audio). Both of the subsidiaries offer unlimited download services for an annual subscription. Unlike VideoBlocks, however, GraphicStock.com and AudioStock.com do not have content marketplaces yet.
Holland said the VideoBlocks marketplace feature has offered a revolutionary approach and radical departure from the industry standard. “We ultimately decided that our first value, as a company, is that when the community wins, we win,” Holland said.
Videoblocks offers users a yearly $99 cloud-based subscription to its unlimited download video library — which currently boasts more than 100,000 individual clips. For comparison, Shutterstock currently sells similar video content at a rate of about $79 per video to its users.
The company’s massive data bank is stored via Amazon Web Services. “If we had tried doing this as little as 3-4 years ago it wouldn't be possible on an economic level or to scale it how we wanted … because of cloud computing it’s now almost infinitely scalable and unbelievably cheap,” Holland said.
