Digital-Video VC Luminari Capital Funds 6 Companies, Plans More Investments (Exclusive)

Specialized venture-capital firm has filed to raise $40 million, with backers including Rupert Murdoch's BskyB

daniel leff Lumari

Luminari Capital, a small Silicon Valley venture-capital firm focused on digital video that counts Rupert Murdoch’s BSkyB among its backers, has revealed its initial six investments — and founder and managing partner Daniel Leff said he’s planning to announce more in the coming weeks.

Leff, previously a partner at Globespan Capital Partners, formed Luminari last year as a “micro VC” exclusively dedicated to the video ecosystem. Luminari has filed documents with the Securities and Exchange Commission to raise $40 million; Leff declined to disclose the current size of the fund and said he’s not done fundraising at this point.

Satcaster BSkyB has put $8 million into the fund. Other backers include senior media execs, individual VCs and other “high-net-worth industry insiders,” according to Leff.

The six companies Luminari has invested in to date are:

  • Roku: Internet set-top and media-device maker whose other backers include BSkyB, 21st Century Fox, Menlo Ventures, Globespan, Hearst and Fidelity Investments. Leff serves on Roku’s board of directors;
  • Kaltura: Online video-publishing platform provider that counts .406 Ventures, Intel Capital, Nexus Venture Partners, SAP Ventures, Silicon Valley Bank and Mitsui & Co. Global Investment among its investors;
  • 1 Mainstream: A content-management platform provider for premium content owners to reach over-the-top devices like Apple TV and Roku; other investors include BSkyB, Menlo Ventures and DCM;
  • DanceOn: YouTube multichannel network dedicated to dance entertainment also backed by AMC Networks and Plus Capital, among others;
  • Plumzi: Provider of tools to convert TV episodes into “appisodes” for smartphones and tablets, also backed by Turner Broadcasting System and Disney; and
  • Fuisz Media: Startup whose automatic video-recognition software adds clickable elements designed to enable ecommerce, also backed by incubator Science Media.

Leff’s investment thesis is that the video ecosystem is going through a fundamental transition, one that will disrupt the pay-TV industry in the way the Internet has transformed other media and entertainment sectors like music, newspapers and books.

“In the video ecosystem, these are multiyear and possibly multi-decade trends, as they were in those other industries,” he said. “There’s an opportunity to find and back the next great video entrepreneurs.”

Luminari’s advisory board includes an array of notable industry execs. Among them are Eric Kessler, former president of HBO; Starz chief strategy officer John Penney; Marwan Fawaz, former EVP of Motorola Mobility and ex-CTO of Charter; Roku CEO Anthony Wood and CMO Matthew Anderson; Fouad ElNaggar, chief strategy officer, CBS Interactive; and Jorge Espinel, Spotify’s head of business development. Leff would not say whether any of those execs have contributed to the Luminari fund.

Menlo Park, Calif.-based Luminari is not a digital content fund per se, Leff said (notwithstanding its DanceOn investment). He pointed to other investors like Chernin Group and Guggenheim Digital Partners as more focused on online-video content plays. “I’m taking more of a picks-and-shovels approach,” he said.

Most of Lumnari’s activity will be seed-round investments with opportunistic investments in more mature companies like Roku, according to Leff.