VideoBlocks, a provider of royalty-free stock video, closed an $8 million funding round led by North Atlantic Capital.
The funding comes after Reston, Va.-based VideoBlocks raised a $10.5 million in Series A round in 2012, led by Updata Partners with participation from QED Investors.
“This year we see the opportunity to invest more heavily in video stock footage and support our quickly growing stock-marketplace business,” said VideoBlocks founder and CEO Joel Holland.
The funding from North Atlantic Capital is a venture-debt deal, which means the investment firm doesn’t own an equity stake in VideoBlocks, Holland said. “It’s an interest payment so we didn’t have to give up any meaningful equity,” he said.
VideoBlocks customers include NBC, Discovery Communications, MTV Networks and Paramount Pictures, along with ad agencies and individual creators. It competes with other stock-video providers such as Shutterstock, Getty Images and Pond5, which last year raised $61 million.
But according to Holland, VideoBlocks charges up to 40% less for its stock-video clips than rival services. The company has 100,000 paying subscribers, most of which pay $99 per year for unlimited access to a library of 115,000 clips VideoBlocks has either produced or acquired. In addition, the company recently launched a video marketplace that pays contributors a 100% commission on sales; it now counts 2,000-plus registered contributors that have uploaded more than 300,000 stock-video clips.
“Our sales are ramping up nicely, and our contributors are making good money,” Holland said. The new funding “will give us more gunpowder to start promoting this marketplace.”
Privately held VideoBlocks is profitable, Holland said, and has about 50 full-time employees. The company plans to continue growing headcount, hiring in marketing and development engineering personnel, he added.
About 1,000 of VideoBlocks’ customers are studios, TV networks, production firms and ad agencies. But Holland believes there’s a growing opportunity to serve a growing creative class of thousands of individual “prosumers” who are producing their own video content.
“VideoBlocks pairs a healthy, growing core business with a highly disruptive new marketplace model that is already producing some incredible results,” North Atlantic Capital partner Mark Morrissette said in a statement. “The platform has proven to be a winner with creators of multiple types – from the hobbyist to the seasoned professional.”
VideoBlocks also operates sister sites GraphicStock for stock graphics and AudioBlocks for royalty-free music, but its focus is on video.