A much hyped Internet company backed by one of L.A.’s wealthiest businessmen has shut down.
Veoh.com in San Diego, which allowed people to view and share videos, and was backed by former Disney Chief Executive Michael Eisner, has run out of money and filed for Chapter 7 bankruptcy. The company plans to liquidate its assets to pay back creditors.
Chief Executive Dmitry Shapiro confirmed the bankruptcy in a Feb. 11 blog post. A spokesperson for the company did not return a request for comment. A spokesman for Tornante Co., Eisner’s investment vehicle, also did not respond to a request for comment.
Veoh was one of the prized assets of Eisner, who ranked 44th on the Business Journal’s 2009 list of Wealthiest Angelenos with a net worth of $615 million. The former Mouse House executive invested in Veoh in April 2006 when some speculated that the site would rise to challenge video powerhouse YouTube.com. Eisner also joined Veoh’s board.
It’s unclear how much Eisner invested in the company; he participated in a $12.5 million financing round. In analyzing his holdings for the Wealthiest Angelenos list last year, the Business Journal estimated his stake in Veoh at approximately $8 million.
Eisner’s investment was viewed as a potentially powerful marriage between an up-and-coming digital media company and a former executive of an old-media conglomerate. At the time, Eisner said he was especially excited about Veoh’s ability to let users build “channels,” or groups of online videos on similar topics or subjects that interested them.
Veoh eventually raised almost $70 million from investors, but it failed to catch on with a wide base of users. Meanwhile, YouTube added some of the same features as Veoh including the option of channel building. Veoh also saw the rise of competitor Hulu LLC, an online video site that offers TV shows and films.
Veoh was also embroiled in a lawsuit with Universal Music Group, which accused the company of copyright infringement. Veoh eventually won the court battle, but it drained the company of money. That, coupled with Veoh’s struggle to find a bigger audience, led to its demise.
New Hybrid
Los Angeles is fast becoming crowded with new-age car companies and budding businesses that are building rechargeable batteries for electric vehicles. But a new local startup, Velozzi, thinks it has something that no other company has: a hybrid electric car that can run on environmentally friendly fuel.
Most hybrid vehicles run on a combination of battery and gasoline power. However, hybrid critics say they don’t eliminate enough gasoline.
Velozzi thinks it has found a solution. The company’s cars will run off of a rechargeable battery, but a microturbine engine will recharge the battery while the car is running. The microturbine engine will be powered by eco-friendly biodiesel or diesel fuel.
“We’re more efficient than a lot of other cars because we burn fuel to charge the battery, not to drive the car,” said Roberto Velozzi, the company’s president.
Velozzi has yet to build its first vehicle, however. The company is working on prototypes now and hopes to have the first completed this summer.
Eventually, the company hopes to mass produce two cars: a sporty two-door called the Supercar and a four-door crossover-type vehicle called the Solo. Both cars would have sportscarlike acceleration with fuel economy of more than 100 miles per gallon – in theory, at least.
The downtown-L.A. based company has about 10 employees, many of whom have extensive engineering and automotive experience, Velozzi said.
Velozzi estimated that he and his employees have poured millions of dollars of their own money into the business.
Cash for Clicker
Clicker Media Inc., an L.A.-based startup that designs guides to videos available on the Internet, has raised $11 million, the company announced Feb. 18.
Clicker has indexed thousands of online videos, shows and films in its programming guides, which viewers can use to find what they want to watch. The company launched in November 2009.
Investors in the latest fundraising round include Jafco Ventures, Benchmark Capital and Redpoint Ventures.
Clicker plans to use the money for product development and partnerships with major consumer electronics and content providers.
Staff reporter Charles Proctor can be reached at [email protected] or at (323) 549-5225, ext. 230.
