News Corp-backed web TV firm raises USD15m

News Corp-backed Kit Digital, the online TV firm formerly known as Roo Group, has raised USD15m from new and existing institutional investors. Kit's founder and CEO Kaleil Isaza Tuzman led the round through his Dubai-based investment vehicle, Kit Capital, which provided nearly half of the funding. The company, which is 5% owned by News Corp, says the funds will help fund future acquisitions and its recent purchase of its subsidiary Sputnik and Swedish online video delivery firm Kamera. Kit changed its name from Roo last month after moving its offices to Dubai and laying off 43 staff. The changes were part of wide-ranging restructuring efforts following a net loss of USD34.6m in 2007, from USD14.6m in 2006.

"This USD15m financing was the last box to check off, so to speak, in the company's intensive restructuring phase," Tuzman, who took over the company last year, says. The CEO says Kit will focus on its goal to be "the first profitable company in the IPTV provisioning industry", predicting particular opportunities outside the US.

Kit will target acquisitions that strengthen its core business, which allows clients to publish, manage and distribute ad-supported digital video content. Clients include News Corp's newspapers The Sun and The Times, as well as Verizon and Google.

The company claims to have USD23.4m in cash and a market cap of USD49.5m based on May 7, with an approximate pro forma enterprise value of USD26.1m. It expects consolidated revenues of roughly USD1.95m per month in 2008 and aims to be profitable by the fourth quarter of the year.