ATLANTA … Digital video company EGT has raised $7.4 million in a second round of funding to market its first product to U.S. cable and satellite television operators and expand operations over time.

The round was led by Sevin Rosen Funds, with co-investors Noro-Moseley Partners, H.I.G. Ventures, Gray Ventures, the Yamacraw Seed Capital Fund and angel investors. The funds will be used .

“The venture capital climate is very competitive, and this Series B financing puts EGT in a unique position as a well-funded young company addressing a tremendous market opportunity,” Chief Executive Greg Nicholson said in a statement. “Sevin Rosen Funds has a reputation for building strong companies, and that is what we are doing here. We believe they will add great perspective to our board of directors.”

EGT’s advanced digital television equipment for communications networks enables low bandwidth distribution and storage of the highest-quality video. Over the past few years, the company has developed a patent-pending signal processing technology. The company’s first product is an MPEG-2 digital video encoder made for cable and satellite
television markets.

The encoder, which is in beta trails at the largest system operators, increases the channel capacity of networks that distribute high-quality digital video. This performance gain can be translated into higher-quality service or additional content and applications over the existing network infrastructure.

“Our technology is a timely and natural match to contemporary market needs,” EGT Chief Scientist Nikil Jayant said in a statement. “As new applications and more services are offered over the same broadband networks, the bandwidth constraint will continue to be an increasingly limiting factor. Through our innovations in real-time compression, modular software and highly configurable hardware design, our customers can deliver a broad range of current and emerging services at higher quality over their existing networks.”

The company will launch its digital video encoder product into the cable market this summer. Soon after, the product will be customized for satellite and telecommunications networks. These operators encode analog television services for distribution to their digital television customer. Consumers will benefit from more services at a higher visual quality.

“EGT is an exciting company to be working with and is well-positioned at the leading edge of the video signal processing industry,” Charles Phipps of Sevin Rosen Funds said in a statement. “We see a significant opportunity in this company and within this market sector.”