Deal in focus: TVbeat raises $2m

London-based TVbeat, a provider of real-time television analytics, raised $2m from new venture player Episode 1 and Czech early-stage investor Credo Ventures in March. Episode 1 led the deal with a $1.5m commitment to the firm.

"The problem with the existing approach to TV audience measurements is that the sample sizes are very small," says Simon Murdoch, partner at Episode 1 and former vice president for Europe at Amazon. "The leading player in the UK works with a sample of a few thousand representative households. The problem comes when you see the results for smaller channels where there are fewer viewers. The small sample size means the number of viewers shows as zero."

Real-time ratings
Based in London and established in 2013, TVbeat provides real-time ratings to broadcasters, advertisers and pay-tv providers via set top boxes connected to the internet. "TVbeat is much more accurate in counting how many people are watching which stations because it has a much larger sample set. It also counts if you're watching on iPad, smartphone or on catch-up services," says Murdoch. The business then sells the gathered information to TV stations and advertisers. So far, the firm's platform measures more than 15 million customer interactions per day using live data from connected set-top boxes and other connected devices. "It's also accurate in real-time, so it can tell if people change channels when the adverts come on, for example. It has very accurate information on how many people are coming in and out of programmes at any one time," says Murdoch.

Founded by Robert Farazin and incubated at Techstars, the company was established following a conversation with the news editor of the biggest channel in Slovenia. A friend of Farazin, the broadcaster could not believe that in 2012 he was only able to view audience analytics of a small sample, collated in an Excel spreadsheet with a one-day delay. "I then spoke to another guy in the business, working on the pay-TV platform side," says Farazin. "I called to ask if he tracks when people watch TV through his set-top boxes, does he have some logs somewhere. He told me they have logs, but they don't do anything with the logs. So I really saw the need for the business."

"I saw that we could take these logs and build a really nice user-interface to create a Google Analytics for TV. We built our first platform in two months using Slovenian data. Then I gave the dashboard to my friend the editor. He was blown away; he couldn't believe it was really possible." Encouraged by the reaction of the industry, Farazin then set about building a business around the platform, which allows broadcasters to better understand audience reaction to a particular story in real time, permitting them to extend or shorten each piece accordingly. The company has been piloted to users in Slovenia, Croatia and Serbia, though its focus will expand across Europe following the fundraising.

TVbeat is Farazin's fifth start-up. His third, DoubleRecall, was incubated at YCombinator in San Francisco and raised $1.6m from US investors and angels including YCombinator, Start Fund, SV Angel, Digital Garage, Itochu Ventures, Mentor Equity and TEEC Angel. "It was very different raising money in Europe compared to the US," says Farazin. "The first big difference was already visible in the incubators. In YCombinator, they really encourage big dreams and we raised the money in less than a month. In Europe, investors are more conservative and wanted more confirmation from the market. But we are happy with that; we raised $2.2m overall, including commitments from angels across five to six months."

This deal was first covered on 5 March

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