CDN Funding Tops $400 Million In Past 18 Months: BitGravity The Latest

In the past 18 months, CDN and P2P based delivery vendors have raised over $300 million to build out and deploy content delivery services. So it should be no surprise to hear that BitGravity announced last week that it had raised $2.5 million from Allen and Company and Blake Krikorian, the co-founder and CEO of Sling Media

Adding up all the investments that CDNetworks, EdgeCast, Panther Express, Grid Networks, Highwinds,
Velocix, Itiva, Move Networks, Pando Networks, Conviva, BitTorrent,
ChinaCache, Rawflow, Oversi and BitGravity have gotten, and it totals $285.35 million. In addition to these sixteen providers, Kontki, SimpleCDN, Vusion and EdgeStream have all raised undisclosed amounts as well which puts the total amount of money raised into the CDN space well over $325 million. And if we think of AT&T’s CDN offering as a startup, which they basically are, with their $75 million investment into their network this year, that puts the total amount of money raised to over $400 million in the past 18 months.

In addition, while BitGravity is the latest to raise money, they won’t be the last. There are at least three to four new CDNs in the U.S. and Asia who are gearing up to enter the CDN market and have already raised, or are in the process of raising money. I am amazed that companies continue to be able to raise money for a new CDN business when there are already over 50 CDN providers and the market is not big enough, and won’t grow fast enough to support them all.

The CDN market is going to be in for a world of hurt in 18-24 months, and most of these CDNs are not going to get acquired or bought out at all, let alone at the kind of revenue multiple investors are dreaming of.