Tuesday, May 7, 2013
Viddy In Recap, To Return Some Funds, Says Report
A report Tuesday from AllthingsD says that once-hot Los Angeles startup Viddy is recapitalizing, and will return $18M of the $30M it raised a year ago. The report says that investors New Enterprise Associates, Khosla Ventures, and Goldman Sachs will receive much of the money they invested in the company. The move comes as Viddy has refocused the company after a massive drop in traffic seen last year after a switchup in the way Facebook was delivering users to social video startups like Viddy. Interestingly enough, AllthingsD says that Science Inc.'s Jason Rapp joins the company's board with the recap, and NEA's Peter Sonsini will leave. The move is quite unusual for a venture backed startup, who are usually loathe to return money to investors outside of an exit, but appears to make sense given a disconnect between the company's sky-high funding valuation last year and the company's current goals.