ROSWELL, GA. – Pathfire, which has developed software to distribute digital television content, has lined up another $27 million in venture capital and a five-year broadcast deal with its newest investor, cable news giant CNN.

CNN News Group purchased an undisclosed minority stake in Pathfire as part of its participation in the company’s fifth funding round. Existing investors that also took part in the round included Quadrangle Group, Halpern Denny & Co., US Venture Partners, Bank of America Capital Investors, Reuters Greenhouse Fund, Riggs Capital Partners, Noro-Moseley Partners, AT&T Ventures, Institutional Venture Partners, Monarch Capital Partners and Kinetic Ventures.

Since it was founded in 1997 as Video Networks, the company has raised close to $120 million in venture capital.

Pathfire officials are attending the National Association of Broadcasters annual convention in Las Vegas this week and couldn’t be reached for comment.

CNN Newsource will use Pathfire’s Digital Media Gateway platform to deliver digital news content straight to the desktops of news directors at more than 680 affiliate stations nationwide. Content will be fed continuously on demand, eliminating the need to wait for scheduled feeds, and the digital format will reduce videotape expenses, CNN officials say.

The deal is similar to one Pathfire struck in February with Warner Bros. Television, which, like CNN, is a subsidiary of AOL Time Warner. Under that three-year agreement, the software firm will electronically distribute about 15 hours of WB-produced programming, including sitcoms, daytime dramas and media footage, to more than 800 broadcast stations across the country.

Pathfire’s software encodes broadcast files, feeds them through a satellite delivery system and allows local TV stations to manage the content by tracking it automatically instead of manually recording, handling and editing the files.

In addition to CNN and Warner Bros., the company also works with ABC, NBC, National Geographic, Charter Communications and Getty Images, among others.

Industry observers expect more media companies to pursue automated digital content software like Pathfire in the next year in the face of falling advertising revenue and the continued migration toward digitization of cable and broadcast content.

Pathfire Web site: www.pathfire.com