Samsung Buys Internet Set-Top Startup Boxee

Consumer-electronics company intends to use tech across Internet-connected devices

Samsung Electronics has acquired Internet set-top startup Boxee, which struggled to gain traction as an over-the-top video platform, with the Korean consumer-electronics giant planning to use Boxee’s technology in smart TVs and other devices.

“Samsung has acquired key talent and assets from Boxee,” Samsung said in a statement. “This will help us continue to improve the overall user experience across our connected devices.”

Samsung did not disclose how many Boxee employees it is hiring or the purchase price. Earlier Wednesday, Israeli tech publication The Marker reported that Samsung is paying $30 million. According to the report, Samsung will retain all 45 Boxee staffers.

New York-based Boxee, founded in 2007, raised $26.5 million in three rounds of funding from investors including General Catalyst Partners, Pitango Venture Capital, Softbank NY, Spark Capital and Union Square Ventures.

SEE ALSO: Boxee Cozies Up to Broadcasters With Rebranded DVR

Boxee CEO Avner Ronen said in an email that he and other employees will be joining Samsung. Company will post an official statement later in the week, he added.

Originally Boxee launched as a software application for TV-connected PCs, but the company discontinued that product last year to shift its model to selling $99 set-tops manufactured by D-Link and a “Cloud DVR” service.

The startup — which focused marketing efforts on providing a cheap alternative to pay TV services — generated considerable buzz in the media and attention from industry players but failed to achieve commercial success. In 2012, the company sold fewer than 70,000 of its Boxee Box set-tops, according to IHS iSuppli; Boxee phased that model out late last year.

The Cloud DVR service, launched last fall in eight U.S. markets, promised unlimited DVR recording of free over-the-air TV (or unencrypted basic cable channels) for $9.99 per month. In addition, the device provided apps for Internet-delivered services such as Netflix, YouTube, Pandora and Walmart’s Vudu rental service.

The startup struck a deal with Walmart to stock the Cloud DVR box in 3,000 stores nationwide and online, but Boxee suffered from consumer complaints that the device and service didn’t work as expected.

Samsung is expected discontinue the Cloud DVR service and Boxee’s retail set-top business.

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