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February 05, 2008
VC-backed Lovefilm Gets Amazon as Investor and Wins Its UK/German Biz
Lovefilm, an online DVD rental service provider, is taking over Amazon Europe’s DVD business in the UK and Germany in a deal that could increase the UK's company's subscriber base to 900K.
The transaction subject to regulatory approval, will also make Amazon its largest shareholder, according to CEO Simon Calver in an interview with alarm:clock euro. "It has a minority stake, but it is the largest shareholder now," he said.
Lovefilm has several other shareholders as a result of its merger with Video Island in 2006 (a 50:50 merger), namely Arts Alliance Media, Index Ventures, Balderton Capital and DFJ Esprit.
This is the latest example of consolidation in this relatively young category of DVD rental and video downloads, what with Glowria, which did several acquistions itself, getting folded into Netgem (our report here).
On that topic Calver said: "Starting up a DVD rental business is easy, but getting the customer experience right is not as easy."
He said that some £20M has been raised by the firm, which has been invested in branding, marketing, and some small acquisitions, as well as in infrastructure (e.g. CRM software). Lovefilm's platform some features like a recommendation engine. Paidcontent describes some of the other services in an analysis of the deal.
Calver did not disclose sales figures. But it was reported last year in Times Online that the firm did £26M in 2005, a figure that has seen some quick growth and was recognized last year.
Posted on February 5, 2008 09:48 AM | Posted to News And Updates | Permalink
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