Joyus, whose video network is designed to sell products to women shoppers, has raised $24 million in a new financing round led by Steamboat Ventures — Disney’s venture-capital affiliate — and VC firm Marker.
The company, based in San Jose, Calif., will use the capital to invest in product, engineering and expanding distribution for its video network, as well as open a studio in L.A. in the next few months, said Joyus founder and CEO Sukhinder Singh Cassidy.
“The next evolution of our company is about creating compelling content and series — differentiated by the fact that it’s shoppable,” she said.
Existing Joyus investors, including Accel Partners, Interwest and Time Warner Investments, also participated in the round, which brings the company to $44 million raised to date.
“Investing in Joyus was a no-brainer for Steamboat,” Steamboat Ventures partner Alex Hartigan said. “As a global media company, Disney and Steamboat are always looking for the next generation of media innovation, and Joyus has created it with a powerful new programming and business model for online video.”
What’s different about Joyus from other digital-video companies: Its business model is based on product sales, not advertising or subscription revenue. In 2014, according to the company, its videos drove about $1 in direct commerce revenue per view. That’s as much as 20 times higher than current preroll video cost per thousand views (CPMs), Singh Cassidy said.
“Our goal is to create content that actually drives shopping behavior,” said Singh Cassidy, former head of Google’s Asia-Pacific and Latin America operations.
Joyus works with more than 500 brands to create videos that include links to buy their products; most of those are smaller companies that have $5 million to $50 million in annual sales, Singh Cassidy said. Clients include L’Oreal, SuperGa, Joe’s Jeans, Verso Skincare, Jouer and Urban Remedy across the Joyus network in beauty, fashion, health and lifestyle categories.
The company splits about 50% of sales revenue with brand partners, and also shares a cut with distribution partners. The privately held company, which has about 50 employees, does not disclose finances or number of unique users for its service.
About 75% of Joyus’ video views come from other sites, with partners including AOL, People.com, Real Simple, Hollywood Life (owned by PMC Media, publisher of Variety), CenturyLink, Verizon and others.
Along with the funding, Joyus announced several recent executive hires. Those include: David Lazar, president and chief customer officer, former CEO of Chaiken Clothing; chief content officer Kathy Samuels, previously with ABC, NBCUniversal, Paramount/CBS and Hasbro Studios; Jennifer Sharp, VP of partnerships, who formerly worked at MGM Studios, Amazon and Walmart.com; Sandra Szahun, head of sales and branded content, former VP of integrated marketing for ABC Television’s daytime and syndication group; and Jonathan Hoeh, VP of operations, who hails from Gap’s Old Navy brand.
“It is not easy to monetize online video, but Joyus makes it look easy,” Marker partner Rick Scanlon said. “The team at Joyus is built to take this model even further, and we are very excited about what the future holds for this company and anyone involved.”