Israeli start up Intercast Networks is about to be sold for $7.2 -$10 million (estimates vary according to Israeli media outlets), to an undisclosed client, marking a significantly lower exit compared to what was invested in the company. The main losers are Gemini and Genesis.
Founded by prof Yechiam Yemini, a CS professor in Columbia University, Intercast Networks (formerly known as Arootz) was able has attract 12 million dollars from Gemini and Genesis. The company developed an HD video distribution platform, that enabled clients to DVR quality content from a pool of 1000 channels. In February of 2008 the company completed the development of the platform and launched a pilot in the US under the brand Kazam.com (now closed), which intended to penetrate the market through a partnership with Columbia University and Purdue.
In the words of Noam Bardin, Intercast Networks’ President and CEO:
“Everyone at Intercast Networks is very pleased with our new name as it successfully reflects the essence of our Multicast-to-Storage™ (M2S) technology. Intercast combines the best of both worlds – the rich content diversity and on-demand functionality of the internet with the efficient and scalable content distribution of broadcast TV. As consumers increasingly turn to the internet to find personalized content to view at their convenience, we are confident that Intercast Networks is well placed to provide the most innovative and cost efficient solution in the industry both to content and network providers.”
Up until two months ago, Intercast employed 36 people. In November, 23 of them were laid off and in recent days the company discontinued to operate Kazam.com and Intercast.com.
Both Gemini and Genesis “lead the charts” in the number of layoffs in their portfolio companies in Israel, having let go of 226 and 316 employees respectively.
Unfortunately, many companies are expected to share the fate of Intercast. Companies that have finalized the development of their product and are now looking for clients and business development deals, encounter a market that at best is willing to integrate their products for free with no long term commitments.
This is good news for several other companies operating in the space, including LimeLight, Akamai, Internap Network Services, iTiva and Level 3 Communications.
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