NBC, Discovery, BSkyB among investors

Digital video recorder maker TiVo said Wednesday that it has raised $51.8 million in financing from NBC and Discovery Communications, as well as its first European investor British Sky Broadcasting, among others.

Although Silicon Valley-based TiVo has not disclosed how it plans to use the new round, the financing should help fuel the company’s efforts to market its technology that enables couch potatoes to record, play back and pause TV shows via a set-top box.

TiVo burned through $50.5 million in the quarter ended April 30, while posting sales of merely $3.2 million. It generates revenues from licensing its patented technology to Rupert Murdoch’s BSkyB, AOL Time Warner and DirecTV, as well as through monthly subscription fees collected from its 189,000 subscribers.

In the new round, which comes only a day before TiVo announces its second-quarter earnings on Thursday, NBC and Discovery Communications are returning investors, while BSkyB is a newcomer to the TiVo financing family. That investment should further help TiVo expand its presence overseas.

Terms of the new round’s dilution of TiVo stock and the amount of money the company will ultimately raise are variable. The debt is convertible into common stock at an initial price of $6.73 a share, but that price could sink as low as $4.21 a share under certain circumstances. Shares of TiVo ended Wednesday trading at $6.14, up 61¢ or 11%.

At the lower price, the notes could be converted into a total of 12.3 million shares, or about 28% of TiVo’s current shares outstanding.

The three sets of warrants TiVo issued as part of the transaction could add as much as $55.7 million to TiVo’s treasury if exercised and add 7.6 million shares. That would be added to the $71.7 million in cash and $50.7 million in restricted cash TiVo had as of April 30.

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