• By
  • Lizette Chapman



The deal, which comes just four months after an investment from Qualcomm Ventures and SanDisk Ventures, boosts total outside funding in the Tel Aviv startup to $22.5 million and was done at a valuation under $100 million.

The alliance comes at a turning point for the 30-person startup that counts 20 million users and is adding new ones at the rate of two million a month.

“They have a massive amount of users,” said Magisto Chief Executive Oren Boiman, referring to the 33 million Odnoklassniki users. “They will now be exposed to Magisto daily.”

Founded to automate the often long and painful process of editing videos for top content, Magisto built an algorithm that scans raw footage for people, colors, places, action and other details to create a polished video which can then be set to music and shared. Like the recent offering from Facebook Inc., which allows users to let the network create a video montage from shared pictures, the service is free.

Mr. Boiman declined to comment on revenue, but said “hundreds of thousands” of Magisto ‘s users pay for the premium mobile app.

Mr. Boiman said along with the exposure and funding–which he will use to continue expanding his engineering and product team–he welcomes the expertise of a new strategic investor.

Existing strategic investor Qualcomm and Magisto collaborated on the Snapdragon 800 processor, a chip designed to help people take better videos as they shoot them. Announced in January, the Qualcomm chip will be in dozens of gadgets, including Samsung’s Galaxy Note 3, Sony ‘s Xperia Z1 and Amazon’s Kindle Fire HDX tablet.

Still, Magisto is not alone in providing the service. Along with Stupeflix Inc., Videolicious Inc. and a dozen or so other startups that have secured venture backing and a growing user base, Magisto competes against products offered by Adobe Systems Inc., Apple Inc. and Microsoft Corp.

Magisto has satellite offices in New York and San Francisco and employs around 30.

Mr. Boiman said Magisto also has pending deals with European and Asian carriers, but declined to provide details.
