Inlet Technologies, a developer of compression technology for high-definition and other digital content, has closed on $5 million in Series B financing.

Investors include Capitol Broadcasting of Raleigh, Technology Venture Partners and Telecommunications Development Fund.

“For years we had been looking for an application to ease the bandwidth bottleneck that HD content creates, especially in electronic news gathering and mobile production,” said Jimmy Goodmon, vice president and general manager, of Capitol’s New Media Group.

Inlet recently released a new version of its Fathom product, which already has won Microsoft Studios as a customer.

Securing investors with backgrounds in technology and communications was crucial for Inlet’s growth, according to Neal Page, its chief executive officer.

“It was important for us to add financial partners to the team who have a strong national network of business leaders, a solid grasp of the market opportunity and the depth and breadth of experience to help guide the company to the next level,” Page said in a statement.

Capitol Broadcasting, which operates WRAL-TV in Raleigh and other stations in North Carolina, is a pioneer in high-definition television and digital technology. WRAL was the first commercial station to launch HD content.

“It was obvious to us early on that HD would cause similar problems for other companies throughout various levels of the industry,” added Goodmon, a son of Jim Goodmon, who runs Capitol. “Television is the business we know best, and when the Inlet team approached us, we were confident that they had the capability to produce a rock solid product that could solve our bottleneck problems and also generate interest throughout the marketplace.”

Telecommunications Development Fund, which is based in Washington DC, focuses on communications sector investments.

Technology Venture Partners invests in networking, communications, software and semiconductor firms. It is based in Minnesota.

Inlet closed on $1.1 million in A round funding in 2004.
“Inlet has outstanding technology and products in the exciting, fast growing, high-profile market of digital media, high-definition specifically,” Page recently told LTW. “The company has made tremendous progress in a very short period of time by securing key partners, developing its core technology, launching its products, building sales channels and securing customers. All in less than two years. That’s why there is so much interest in Inlet.”