A year after its presentation at the Venture 2001 conference, Zoom Culture’s appearance is bearing fruit.
The company, which specializes in distributing videos produced by college-age students, has obtained $7 million in second-round venture financing, Chief Executive Marty Lafferty says. The deal is being led by Chrysalis Ventures of Louisville, Ky., which first became acquainted with the company a year ago at the regional venture capital conference sponsored by the Council for Entrepreneurial Development.
“It’s kind of ironic that we finished this on the anniversary of our first meeting, but it takes a while to get these things done now,” Lafferty says. Existing investors Intersouth Partners, Cordova Ventures, Tri-State Investment Group, Atlantis Group and Charlotte Angel Partners also participated in the round, he adds.
Zoom will use the cash infusion to develop new programming for cable and network television and to expand its sales into new territories, according to Lafferty.
Twelve shows, all targeted at 18- to 24-year-olds, are currently in production. They focus on dating, college sports, fashion and other “rites of passage” for that age group, he says. A comedy about the college admissions process also is on tap, he says.
The company began purely as an online venture but has rapidly been expanding into more television and video offerings, including “Hip Hop Nation”, a show focusing on the rap and hip hop music scene that several NBC-owned television stations have picked up for a 13-week run, and “Spring Break”, a documentary movie that Zoom is selling in VHS and DVD format.
Lafferty says more broadcast outlets are interested in the company’s offerings because of its low cost, digital production processes and it’s much sought after target audience. The company now has signed up 500 video directors, who pay a $100 monthly fee for access to video equipment, and is rapidly expanding its base of on-air talent, who pay $25 a month for the chance to appear in a video.
“It was as though the economy had been closed after 9-11 and now everything is open again,” he says. “Everybody has been coming to us looking to produce something.”
Last funding round?
Zoom concentrates its efforts in 12 markets nationwide, and Lafferty expects to add eight more by the end of the year. Now that the video production and distribution model has been proven, it’s almost like franchising the concept, he says.
The latest funding round might be Zoom’s last private financing. Lafferty says the company should be profitable within the next year, but officials may want to take advantage of the company’s strengths and expand far beyond making a profit.
“There’s a lot of excitement about what we’re doing, and we want to keep fueling it,” he says. “We could grow a heck of a lot faster if we had another strategic infusion down the line, but we’ll see where we are later this year before deciding.”
Zoom Web site: www.zoomculture.com