Web-based video editing service company Magisto Ltd. has raised $5.5 million in its second financing round from Horizons Ventures, the private investment arm of Li Ka-shing, and current investor Magma Venture Partners. This is Li Ka-shing's first investment in an Israeli company. He has invested in both Facebook Inc. and Secondmarket Inc. Magma invested $2 million in Magisto's first financing round 18 months ago.
Magisto also launched its free, web-based video editing service that automatically turns any unedited video footage into short, fun movies to share with friends and family. The movies can be uploaded onto YouTube, Facebook, and Twitter, or sent as an e-mail attachment.
Magisto CEO Oren Boiman told "Globes" that the idea for the company was born following the birth of his daughter. "When Tamar was born, I bought a video camera and began shooting. I soon had a huge amount of raw footage that I didn’t know what to do with. My wife and I decided to make a short clip about her brita (baby girl's naming ceremony). We thought it would be easy, but we struggled for two weeks with the material."
Magisto enables users to upload raw footage, pick a title, and press the edit button, and obtain a readymade movie.
"Globes": How does the technology work, and how does the computer know that the most important thing to focus on is the mother of the bride?
Boiman: "Our software isn't intended to replace professional video editors. We enable the editing of video clips for sharing. The product was designed by mathematicians, video experts, and creative staff. It can identify the main characters, their conduct, backgrounds and vistas and edit it into a story. The responses from users of the pilot were exciting."
How do you make money on this?
"This is a virgin market and there are no similar products, but the demand is huge. One billion smartphones with videocams will be sold in 2011. We intend to initially offer the service for free, and to offer premium services in 2012. Our present objective is to improve the quality of the product and films."
Horizons Ventures has invested in stars like Facebook, not in Israeli companies. How did you reach them?
"Horizons came to us through our first investor, Magma. There was enthusiasm at first sight, and we received an offer on the same day. We're proud that we were chosen and we already feel their help in opening doors we couldn’t have opened on our own."
Frank Meehan of Horizons Ventures said, "Do-it-yourself video editing is dead. Magisto is an entirely different video editing experience that delivers great quality video editing that has never been seen before. Magisto is the first company to actually make this automated editing work and bring it to market in an easy to use web service. The potential for this technology is significant, especially given the tremendous growth of video capable devices in recent years."
Published by Globes [online], Israel business news - www.globes-online.com - on September 20, 2011
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